UNILEVER could find itself embroiled in a multi-billion dollar bidding war for hair care specialist Alberto Culver.
Analysts were yesterday bracing themselves for a rival bid for the firm, with L’Oreal said to be the most likely candidate. German consumer goods giant Henkel is also thought to be considering its position.
JP Morgan analyst John Faucher said in a note that “the market seems to be expecting another bid, as the stock is trading through the bid... We think a counter-bid is not impossible.”
And a note by RBS analyst Julian Hardwick said: “We expect a positive response to this deal, tempered only by concern that L'Oreal could counter bid, particularly given the underperformance since the second quarter results.”
Unilever said on Monday it will buy US hair and skin care specialist Alberto Culver, the firm behind household brands such as V05 and TRESemme, in a deal worth $3.7bn (£2.34bn).
It is understood the bid has been recommended to shareholders and that a £125m break-clause will come into play if either party pulls out of the deal. According to Bank of America analyst Nico Lambrechts: “The existence of a break clause between Unilever and the board could make a counterbid more complex but not impossible.”
If the Unilever deal goes through it will follow a yet-to-be completed deal to buy Sara Lee’s body care division for $1.3bn. The firm’s largest value acquisition was the massive $20.3bn acquisition of Bestfoods in 2000.
The deal would bolster Unilever’s flagging hair care sales in its core US market. In the last year Alberto Culver generated sales of $1.6bn and earnings of $250m.