Unilever spreads risk for chief exec Polman, outsourcing CEOs and Sir Mick Davis mines the Tories

Mark Kleinman
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Unilever's spreads division includes Flora (Source: Unilever)

Polman's mustard: as corporate epitaphs go, it wouldn’t be a bad one for the chief executive of Unilever to aspire to when he retires from the consumer goods behemoth.

First, though, he must navigate a crucial period – his immediate priority being to exit Unilever’s global spreads business as smoothly as a hot knife through a tub of Flora.

The mooted £6bn price tag looks achievable, but private equity bidders are rightly concerned about steep sales declines in the category as consumers switch to healthier alternative products.

In the last fortnight, two consortia - comprising Bain and Clayton Dubilier & Rice; and Blackstone and CVC – have assembled a wealth of industry experience to back their offers.

I’m told that PAI Partners has now joined Apollo Management, Carlyle and KKR in examining a rival bid for the division.

Read more: Private equity heavyweights team up for Unilever's spreads division

That should provide sufficient competition to guarantee pricing tension in the process, even with negligible interest from trade buyers.

The alternative demerger option floated by Unilever looks like a relative non-starter – largely because of the tepid appetite of many of its largest investors.

Polman’s other task is to make demonstrable progress towards the 2020 targets he set out in April: increasing leverage while retaining a strong credit rating, investing in faster-growth businesses, and exerting a tighter grip on marketing spending.

All of which, incidentally, sounds a lot like the oft-derided strategy of Kraft Heinz and 3G Capital, whose £115bn approach for Unilever this year sparked Polman’s overhaul in the first place.

Outsourcing CEOs

What’s the fastest way to become a millionaire investing in the London stock market?

A couple of years ago, as Capita, G4S and Serco lurched between crises, the cute answer would have been to start as a multi-millionaire and buy a basket of shares in Britain’s biggest outsourcers.

This week’s announcement that the accountancy watchdog is probing Deloitte over the preparation of Mitie’s financial statements was a reminder that the sector’s complex financial presentation is frequently on the wrong side of opaque.

G4S at least has turned a corner – up 80 per cent in the last 12 months, its share price underlines investors’ faith in Ashley Almanza, the chief executive since 2013.

Capita’s chairman, Sir Ian Powell, is searching for similar alchemy as he hunts a successor to Andy Parker, its beleaguered outgoing boss.

I understand that one of the candidates approached during the recruitment process was Leo Quinn, currently performing a successful turnaround at construction group Balfour Beatty.

Capita has a market cap roughly double that of Balfour Beatty’s, but friends of Quinn say he rejected the approach.

“Leo doesn’t leave a job half-done,” said one.

That leaves Sir Ian with a shortlist said to consist of several other serving chief executives – and we shouldn’t have to wait long to find out who’s got the nod.

Read more: Capita share price jumps as it nears call centre agreement with BA

Mick mines the Tories

In the absence of a proper post-election cabinet reshuffle, the most intriguing recent appointment involving Prime Minister Theresa May was that of Sir Mick Davis as the Conservative party’s chief executive.

But what of ‘Mick the Miner’s’ other priority, X2 Resources, the vehicle he set up in 2013 to dig out undervalued resources assets?

The absence of a deal during the first three years of its existence left both Davis and X2’s investors frustrated, to the extent that some withdrew their backing altogether.

Others, such as Noble Group, the stricken commodities trader, had little choice in pulling out.

Yet Davis, who until recently was the Tory treasurer, is said to still harbour ambitions to pursue deals.

That may be wise. His review of the Conservatives’ lamentable campaign is unlikely to take long.

And given that Davis is, I understand, a non-dom, there’s no prospect of him following in his party predecessors’ footsteps into the House of Lords.

Read more: Mick Davis’ X2 Resources bid for Anglo assets not yet tabled

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