17 February 2017 by lberuti
HNZ ( Kraft Heinz Co ) made an unsolicited $143Bln offer for UNANA ( Unilever N.V. ). Indeed, the latter said today that it rejected a $50 a share proposal – consisting in a mix of roughly $30 in cash payable in USD and 0.222 shares of the new enlarged company – that would create one of the biggest food and beverage companies, ranking second only behind NESTLE ( Nestle SA ) in terms of sales. Despite being rebuffed by the Anglo-Dutch company, HNZ announced they would keep “working to reach an agreement on the terms of a transaction”. Even if the two companies find acceptable terms, the deal could come against a number of hurdles as it would create giant in the sector. They would have to convince the EU that competition would not be impaired. They would also need to convince the UK Prime Minister, who singled out Kraft’s 2010 takeover of Cadbury as an example of a deal that should have been blocked during her bid to gain the leadership of her party. That did not prevent investors to lean on UNANA’s 5-year risk premium though. They sent it 13bps wider to 41bps, as it has some catch up to do to reach HNZ’s, which currently trades at 70bps.
Meanwhile, the broader credit market ended the session only marginally wider, despite having a soft tone during most of the day on the back of a potential left-wing coalition for the French elections, which could prevent pro-markets candidates from reaching the second round.