Unilever has ruled out raising its £50bn bid for GlaxoSmithKline’s consumer health arm after the pharma giant rebuffed the latest of three approaches in December.
Unilever has battled a plummeting share price and investor exodus this week after reports emerged of the FTSE 100 firm’s three cash-and-share bids for the business last year, first reported by The Sunday Times.
GSK confirmed it had rebuffed a £50bn bid in December and Unilever bosses have today said they will not look to increase the offer.
In a statement today, Unilever said: “We note the recently shared financial assumptions from the current owners of GSK Consumer Healthcare and have determined that it does not change our view on fundamental value.
“Accordingly, we will not increase our offer above £50bn.
“Unilever is committed to maintaining strict financial discipline to ensure that acquisitions create value for our shareholders. Unilever also reiterates its commitment to continuing to improve the performance of its existing portfolio through its ongoing focus on operational excellence, its upcoming reorganisation and by rotating the
portfolio to higher growth categories.”
The backtrack comes after a week of intense criticism for Unilever which saw its share price plummet as much as 10 per cent.
Credit rating agency Fitch yesterday warned that a continued pursuit of GSK’s consumer arm would lead to a downgrade in Unilever’s credit rating from A with a “stable” outlook, to triple B, the lowest investment-grade rating.
Both Unilever and GSK shareholders rounded on the approach from Unilever after the reports emerged.