Kraft Heinz bid for Unilever adds flavour to London's end-of-week trading

 
Jasper Jolly
Food Giants Kraft And Heinz To Merge
Kraft Heinz is backed by Warren Buffett (Source: Getty)

Food firm Unilever propped up the FTSE 100 after US competitor Kraft Heinz made a huge $143bn (£115bn) merger offer for the London-listed firm to inject some energy to trading at the end of the week.

Unilever’s share price popped by 13.43 per cent as it briefly reached an all-time record high on the news, although it pared some of those gains in afternoon trading to close at 449.5p.

However, Unilever’s board was quick to reject the $50 per share offer, which represented an 18 per cent premium. Investors will be watching eagerly to see if the US company increases its offer.

Read more: Saucy combination: Kraft Heinz has made a £115bn merger offer for Unilever

Bottling company Coca-Cola HBC was the other main mover on London’s main index, rising by a further 4.03 per cent, after strong results on Thursday saw its share price fizz by 4.88 per cent.

London’s main index may have been boosted by weakness in sterling, which briefly dipped below $1.24 against the US dollar after earlier breaching the $1.25 mark on news of lower than expected retail sales.

A weaker pound boosts many FTSE-listed multinational companies as extensive foreign earnings become more valuable. It may also have been a decisive factor in the Kraft bid, with the US company, backed by veteran investor Warren Buffett, seeing a much cheaper Unilever.

Read more: Investors pull money from Europe as the pull of Trump strengthens

Meanwhile the dollar also advanced against the euro, continuing the move away from European assets ahead of crucial talks over the terms of Greece’s bailout.

Investors have moved money out of European assets ahead of a calendar full of political flashpoints, with Greece talks sitting alongside elections in France, the Netherlands, and Germany as potential threats this year.

Related articles