Can Kraft Heinz Come to Terms With Unilever?
Kraft Heinz shares saw a handy gain early on Friday as it continues to pursue an acquisition of Unilever, which would be perhaps one of the largest cross-border deals ever.
[cnxvideo id=”655422″ placement=”ros”]Shares of Kraft Heinz Co. (NASDAQ: KHC) saw a handy gain early on Friday, following a long saga of looking for an acquisition target. However, the search does not appear to be over. Kraft Heinz recently made an offer to acquire Unilever PLC (NYSE: UL) in perhaps one of the largest cross-border deals ever.
This deal was ultimately rejected, but Kraft Heinz plans to continue negations with Unilever over the terms of the transaction. Unilever management reportedly said that this offer fundamentally undervalued company:
Unilever rejected the proposal as it sees no merit, either financial or strategic, for Unilever’s shareholders. Unilever does not see the basis for any further discussions.
The transaction originally was valued up to $143 billion, or about $50 per share, which was a premium of 18% from Thursday’s close at $42.57. Although this seems to just be a head fake, it is entirely possible that these two could come to terms.
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Unfortunately one of the losers from this deal was Mondelez International Inc. (NASDAQ: MDLZ). There was much speculation that this snack maker would be the main target for Kraft Heinz. Back in 2012, Mondelez was spun off from Kraft Heinz.
It remains to be seen what will happen, but what is for sure is that Kraft Heinz is not done hunting.
Shares of Kraft Heinz closed Thursday down 4.2% at $87.28, with a consensus analyst price target of $90.29 and a 52-week trading range of $71.82 to $91.30. In early trading on Friday, the stock was up 7.5% at $93.88.
Unilever traded Friday morning at $46.74, up 9.8%, in a 52-week range of $38.58 to $48.97 and with a consensus price target of $38.85.
Mondelez shares were down 3.8% at $41.55 just after the opening bell. The consensus price target is $49.38, and the 52-week range is $39.21 to $46.40.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
