Terry Smith has launched a fresh attack on Unilever’s management as he labelled the failed bid for GSK’s consumer arm a “near death experience” in a letter to investors.
Smith, a major Unilever shareholder, said the firm needed to refocus on improving the performance of the existing business rather than looking for blockbuster acquisitions.
The attack from Smith after a week of intense criticism and falling share price for the FTSE 100 firm after reports emerged of its takeover bids for GSK’s consumer portfolio of consumer brands.
In a letter to investors, the Fundsmith founder said: “It seems to use that Unilever’s management’s response to its poor performance has been to utter meaningless platitudes to which it has now attempted to add major M&A activity. What could possibly go wrong?”
Smith, whose Fundmsith firm owns an £814m position in Unilever, attacked the firm the week before the reports emerged of the takeover bid for “losing the plot” with its focus on purpose and sustainability. In his letter to investors today he again attacked Unilever’s management for its “penchant for corporate gobbledegook”.
Unilever shares slid over 10 per cent this week after an overwhelmingly negative reception to the bids. Shares in the firm are currently trading at 5 per cent below their Monday opening price.
After defending the approaches early in the week, Unilever backed down from hiking its latest £50bn cash-and-share approach for the business, saying that its assessment of the “fundamental value” of the consumer brands group had not changed.