Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Unilever (ULVR)

Share latest information on individual companies and hot news discussions. LSE Main Market companies only
Forum rules
No penny shares or promotional posts
dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Unilever (ULVR)

#474330

Postby dealtn » January 19th, 2022, 9:49 am

Darka wrote:... the market thinks that the bid is a mistake...


The market is a mechanism for valuing the future (unknowable) cashflows to an equivalent price today. It isn't saying the bid is a mistake, it can't reasonably know.

What can be known is the "riskiness" or variance on those future unknowns has just gone up. As a result the appropriate market discount rate has also changed. Mechanically that leads to a lower price. The market is, unemotionally, doing its job.

There may also be participants in the market that are acting emotionally, and not dispassionately, as such the efficient market move is being exaggerated.

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Unilever (ULVR)

#474421

Postby absolutezero » January 19th, 2022, 12:54 pm

SalvorHardin wrote:
Dod101 wrote:Well I am not a HYPer but both Unilever and Glaxo are commonly held in HYPs and at least a number of those commenting here are common names on the HYP Board.

For what it is worth I know that it could certainly be said that the Unilever management has gone off the boil but Unilever, like most shares, has periods when it does well and then not so well depending on economic realities. Covid has upset a lot of plans and so will inflation so it is a bit difficult to say how Unilever is coping. Their culture is right and at times they could be said to be rather too conservative for their own good so I think that a tilt at the Glaxo healthcare division is surely a good thing. They know a lot more about their markets and its prospects than I do.

If Unilever's share price keeps falling we'll soon be at a point where Unilever's yield qualifies for HYP under the standard HYP criteria :D

Management has taken its eye off the ball in recent years, with lots of attention being paid to politics and virtue signalling thus distracting senior management from actually running the business. The debacle of the proposed move to Rotterdam, which amongst other things would have imposed Dutch withholding tax on non-Dutch shareholders, caused the the last CEO (Polman) to resign.

Unilever is talking about the higher purpose of Hellmann's; all I can say is WTF, it's mayonnaise and I put it on salad, sandwiches and chips and don't want a serving of politics or to be lectured about it. And I'm not the only one. Go woke, go broke.

How come Procter & Gamble and Nestle's share prices have done noticeably better in the last few years? They're very similar businesses.

Ben & Jerry's boycott of Israel has meant that institutions in thirty-five American states have had to sell their Unilever shares and bonds, because of laws against boycotting Israel. Quite a lot of people are now boycotting not only Ben & Jerry's, but all Unilever goods. A good start would be to sell Ben & Jerry's ASAP.

That said, Unilever definitely meets Warren Buffett's principle: "I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will"

This pretty much chimes with my thoughts on ULVR. My finger is hovering over the dump button.
You did say this was one of the few operating companies you owned. Is this still thee case or did you get rid?

SalvorHardin
Lemon Quarter
Posts: 2049
Joined: November 4th, 2016, 10:32 am
Has thanked: 5300 times
Been thanked: 2465 times

Re: Unilever (ULVR)

#474427

Postby SalvorHardin » January 19th, 2022, 1:11 pm

absolutezero wrote:
SalvorHardin wrote:
Dod101 wrote:Well I am not a HYPer but both Unilever and Glaxo are commonly held in HYPs and at least a number of those commenting here are common names on the HYP Board.

For what it is worth I know that it could certainly be said that the Unilever management has gone off the boil but Unilever, like most shares, has periods when it does well and then not so well depending on economic realities. Covid has upset a lot of plans and so will inflation so it is a bit difficult to say how Unilever is coping. Their culture is right and at times they could be said to be rather too conservative for their own good so I think that a tilt at the Glaxo healthcare division is surely a good thing. They know a lot more about their markets and its prospects than I do.

If Unilever's share price keeps falling we'll soon be at a point where Unilever's yield qualifies for HYP under the standard HYP criteria :D

Management has taken its eye off the ball in recent years, with lots of attention being paid to politics and virtue signalling thus distracting senior management from actually running the business. The debacle of the proposed move to Rotterdam, which amongst other things would have imposed Dutch withholding tax on non-Dutch shareholders, caused the the last CEO (Polman) to resign.

Unilever is talking about the higher purpose of Hellmann's; all I can say is WTF, it's mayonnaise and I put it on salad, sandwiches and chips and don't want a serving of politics or to be lectured about it. And I'm not the only one. Go woke, go broke.

How come Procter & Gamble and Nestle's share prices have done noticeably better in the last few years? They're very similar businesses.

Ben & Jerry's boycott of Israel has meant that institutions in thirty-five American states have had to sell their Unilever shares and bonds, because of laws against boycotting Israel. Quite a lot of people are now boycotting not only Ben & Jerry's, but all Unilever goods. A good start would be to sell Ben & Jerry's ASAP.

That said, Unilever definitely meets Warren Buffett's principle: "I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will"

This pretty much chimes with my thoughts on ULVR. My finger is hovering over the dump button.
You did say this was one of the few operating companies you owned. Is this still thee case or did you get rid?

I sold half of my Unilever shares. A major reason for my not selling the rest is that I'm already paying a lot of CGT in 2021/22 and don't really want to crystallise more gains. Psychologically it's been a bit difficult to contemplate selling the lot as I'd pigeonholed Unilever as an "eternal" hold for many years. Also a lot of people are now aware that Unilever is quite badly managed and some of them have the financial clout to shake things up, either by buying a big stake and then demanding board changes or even making a bid for the whole company.

Berkshire Hathaway might be interested, though the Kraft Heinz merger debacle has probably put Mr. Buffett off from doing a similarly large deal.

BullDog
Lemon Quarter
Posts: 2446
Joined: November 18th, 2021, 11:57 am
Has thanked: 1966 times
Been thanked: 1199 times

Re: Unilever (ULVR)

#474468

Postby BullDog » January 19th, 2022, 2:56 pm

Dead cat bounce today. Will set an auto sell and hopefully break even on my exit from ULVR if there's a bit more anti gravity here.

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Unilever (ULVR)

#474490

Postby ADrunkenMarcus » January 19th, 2022, 4:31 pm

Unilever announced they won’t increase their bid.

Zo is het levens!

TheMotorcycleBoy
Lemon Quarter
Posts: 3245
Joined: March 7th, 2018, 8:14 pm
Has thanked: 2222 times
Been thanked: 587 times

Re: Unilever (ULVR)

#474494

Postby TheMotorcycleBoy » January 19th, 2022, 4:35 pm

dealtn wrote:
TheMotorcycleBoy wrote:It seems highly likely that management have lost the plot. Back in March 2021:

https://www.investegate.co.uk/unilever- ... 30017706X/

the stated aim of which

The Initial Programme, the purpose of which is to reduce the capital of Unilever PLC, will take place within the limitations of the authority granted to the Board of Unilever PLC by its general meeting, held on 5th May 2021, pursuant to which the maximum number of shares to be bought back by Unilever PLC is 262,811,000

So they "wanted to reduce their capital" then, despite knowing full well back then that GSK's health care was on the table? And now, when it looks as if they may not have the readies sufficient to buy HC, they are suddenly looking to raise capital. They seem to be asleep at the wheel. Zero forward planning, not how I do business.

Matt


So in a hypothetical world where you might have an overdraft, and a monthly salary from which you have excess funds that enable you to save, what do you do?

You might have a potential need for a new car in a year or twos time, or a wish to move house requiring an additional mortgage, for instance.

Do you eshew paying off the overdraft, preferring to hold cash at home, because you might need that bank finance at some point in the future for those large strategic items. Or do you for short term reasons pay down the overdraft, save interest etc. and consider the financing of those longer term items (that might not happen, or be significantly different) as and when they become more solid, enjoying the flexibility and potential liquidity when required?

Having short term Capital allocation decisions isn't mutually exclusive to having concurrent longer-term ones which depend on a large number of variables both in terms of outcome and how they might be financed.

I've not been overly impressed with the (short term) actions of this particular Board of Directors, although I am a holder of their equity, but I wouldn't be impressed either by a dogmatism around Capital allocation that precluded repayment of excess Capital.

Ok. Short term vs Long term goals.

However, IMO the analogy breaks down in a couple of ways. Firstly (from AR2020) Alan Jope's "on target" annual compensation in 6.84 million euros. I think that means he's (supposedly) being paid for Strategic Vision. By mistiming the availability of GSK's HC and his buyback flutter, he's failed to demonstrate this. Even I manage my income/future purchases better than that.

Secondly their outstanding shares do not constitute an overdraft. It's equity not debt. ULVR, to my knowledge they ain't actually obliged to 1) pay back their shareholders anytime soon, or 2) even pay an annual dividend. In fact IIRC several firms in the height of the lockdown in 2020, temporarily cancelled their divs, and were actually awarded by the shareholders, i.e. for certain shares the SP would rise, as the market judged the cash save to be "prudent".

However I guess in the case of ULVR, cancelling their dividend would result in their SP falling off a cliff! Perhaps when they were executing their BB scheme, some analysts felt that they trying to deliberately reduce the dividend payout burden (however I'm sure their dividend cover is currently >1.0 as I type), and that move signalled predictions of lower profitability, hence their fall versus the rest of the market over the BB campaign.

Matt
Last edited by TheMotorcycleBoy on January 19th, 2022, 4:37 pm, edited 1 time in total.

idpickering
The full Lemon
Posts: 11276
Joined: November 4th, 2016, 5:04 pm
Has thanked: 2468 times
Been thanked: 5763 times

Re: Unilever (ULVR)

#474496

Postby idpickering » January 19th, 2022, 4:37 pm

Unilever update

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.

We look forward to updating on our performance for Q4, and the full year, on February 10th and continued engagement with shareholders.


https://www.investegate.co.uk/unilever- ... 30130014Z/

TheMotorcycleBoy
Lemon Quarter
Posts: 3245
Joined: March 7th, 2018, 8:14 pm
Has thanked: 2222 times
Been thanked: 587 times

Re: Unilever (ULVR)

#474498

Postby TheMotorcycleBoy » January 19th, 2022, 4:40 pm

idpickering wrote:Unilever update

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.

We look forward to updating on our performance for Q4, and the full year, on February 10th and continued engagement with shareholders.


https://www.investegate.co.uk/unilever- ... 30130014Z/

It's pretty sad that they needed the Stock Market to advise them to back off!

Matt

BullDog
Lemon Quarter
Posts: 2446
Joined: November 18th, 2021, 11:57 am
Has thanked: 1966 times
Been thanked: 1199 times

Re: Unilever (ULVR)

#474504

Postby BullDog » January 19th, 2022, 4:50 pm

ADrunkenMarcus wrote:Unilever announced they won’t increase their bid.

Zo is het levens!

Thanks. Hence the dead cat bounce today. There's little doubt in my mind that the deal which is hopefully dead and buried would have been disastrous for Unilever shareholders. I hope the management feel thoroughly humiliated and now knuckle down to restore some of the many millions wiped off the company value this week.

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Unilever (ULVR)

#474507

Postby Dod101 » January 19th, 2022, 4:58 pm

BullDog wrote:
ADrunkenMarcus wrote:Unilever announced they won’t increase their bid.

Zo is het levens!

Thanks. Hence the dead cat bounce today. There's little doubt in my mind that the deal which is hopefully dead and buried would have been disastrous for Unilever shareholders. I hope the management feel thoroughly humiliated and now knuckle down to restore some of the many millions wiped off the company value this week.


Unilever is not a dead cat but certainly this does not seem to have done much for the management of Unilever. Why do you say that this deal would have been disastrous for Unilever shareholders? What is your basis for that conclusion? Assuming there are no other developments before the flotation, it will be interesting to see what valuation the market puts on the company.

Of course these sorts of approaches must happen all the time but usually are not reported and somebody's security was not very good for it to have received the full glare of publicity.

Dod

BullDog
Lemon Quarter
Posts: 2446
Joined: November 18th, 2021, 11:57 am
Has thanked: 1966 times
Been thanked: 1199 times

Re: Unilever (ULVR)

#474515

Postby BullDog » January 19th, 2022, 5:20 pm

Dod101 wrote:
BullDog wrote:
ADrunkenMarcus wrote:Unilever announced they won’t increase their bid.

Zo is het levens!

Thanks. Hence the dead cat bounce today. There's little doubt in my mind that the deal which is hopefully dead and buried would have been disastrous for Unilever shareholders. I hope the management feel thoroughly humiliated and now knuckle down to restore some of the many millions wiped off the company value this week.


Unilever is not a dead cat but certainly this does not seem to have done much for the management of Unilever. Why do you say that this deal would have been disastrous for Unilever shareholders? What is your basis for that conclusion? Assuming there are no other developments before the flotation, it will be interesting to see what valuation the market puts on the company.

Of course these sorts of approaches must happen all the time but usually are not reported and somebody's security was not very good for it to have received the full glare of publicity.

Dod

There are far too many precedents to quote that form my opinion. But here's a couple that actually destroyed the entire company, ICI take over of Quest (Unilever flavours and fragrance division). There's Marconi's takeover of Reltec and Fore Systems which bankrupted the company.

More recently Reckitt Benkiser takeover of Mead Johnson which destroyed huge value and Reckitt struggled ever since.

Heck, even Shell got severe indigestion when it took over BG Group.

OK, granted, it's easy to pick holes. But the precedents are not good at all. If GSK's consumer business can't thrive within the greater GSK, why does anyone think it can do any better within Unilever?

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Unilever (ULVR)

#474516

Postby absolutezero » January 19th, 2022, 5:21 pm

SalvorHardin wrote:
I sold half of my Unilever shares. A major reason for my not selling the rest is that I'm already paying a lot of CGT in 2021/22 and don't really want to crystallise more gains. Psychologically it's been a bit difficult to contemplate selling the lot as I'd pigeonholed Unilever as an "eternal" hold for many years. Also a lot of people are now aware that Unilever is quite badly managed and some of them have the financial clout to shake things up, either by buying a big stake and then demanding board changes or even making a bid for the whole company.

Berkshire Hathaway might be interested, though the Kraft Heinz merger debacle has probably put Mr. Buffett off from doing a similarly large deal.

They say you should never fall in love with a share.
Until recently, if I was only allowed to own one company then Unilever would have been that company.
After this week, (plus the Mayonnaise mission statement + B&J political nonsense) I'm no longer convinced that is the case.
Though I haven't (yet?) pulled the trigger on it.

As Buffett (supposedly) said: 'I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.'
Like you say, hopefully someone with some clout will shake things up a bit after this debacle.

absolutezero
Lemon Quarter
Posts: 1505
Joined: November 17th, 2016, 8:17 pm
Has thanked: 542 times
Been thanked: 653 times

Re: Unilever (ULVR)

#474517

Postby absolutezero » January 19th, 2022, 5:23 pm

BullDog wrote: If GSK's consumer business can't thrive within the greater GSK, why does anyone think it can do any better within Unilever?

Or to ask a slightly different question: If it's such a good business, why is GSK after flogging it once it's spun off?

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Unilever (ULVR)

#474518

Postby Dod101 » January 19th, 2022, 5:29 pm

BullDog wrote:
Dod101 wrote:
BullDog wrote:
ADrunkenMarcus wrote:Unilever announced they won’t increase their bid.

Zo is het levens!

Thanks. Hence the dead cat bounce today. There's little doubt in my mind that the deal which is hopefully dead and buried would have been disastrous for Unilever shareholders. I hope the management feel thoroughly humiliated and now knuckle down to restore some of the many millions wiped off the company value this week.


Unilever is not a dead cat but certainly this does not seem to have done much for the management of Unilever. Why do you say that this deal would have been disastrous for Unilever shareholders? What is your basis for that conclusion? Assuming there are no other developments before the flotation, it will be interesting to see what valuation the market puts on the company.

Of course these sorts of approaches must happen all the time but usually are not reported and somebody's security was not very good for it to have received the full glare of publicity.

Dod

There are far too many precedents to quote that form my opinion. But here's a couple that actually destroyed the entire company, ICI take over of Quest (Unilever flavours and fragrance division). There's Marconi's takeover of Reltec and Fore Systems which bankrupted the company.

More recently Reckitt Benkiser takeover of Mead Johnson which destroyed huge value and Reckitt struggled ever since.

Heck, even Shell got severe indigestion when it took over BG Group.

OK, granted, it's easy to pick holes. But the precedents are not good at all. If GSK's consumer business can't thrive within the greater GSK, why does anyone think it can do any better within Unilever?


Well of course to answer your last point, because Unilever is essentially a marketing company. They have many top brands with very large sales. That is why they saw/see value in the healthcare division. There is no doubt that any large takeover has risks and of course your examples are correct but I am sure that there have also been others which have worked out very well.

Dod

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Unilever (ULVR)

#474526

Postby ADrunkenMarcus » January 19th, 2022, 5:56 pm

GSK may have questions to answer depending on the outcome for their consumer health business!

BullDog
Lemon Quarter
Posts: 2446
Joined: November 18th, 2021, 11:57 am
Has thanked: 1966 times
Been thanked: 1199 times

Re: Unilever (ULVR)

#474528

Postby BullDog » January 19th, 2022, 5:58 pm

absolutezero wrote:
BullDog wrote: If GSK's consumer business can't thrive within the greater GSK, why does anyone think it can do any better within Unilever?

Or to ask a slightly different question: If it's such a good business, why is GSK after flogging it once it's spun off?

Exactly. Reeks of a management who have run out of ideas and believe they "have to be seen to be doing something". Very common in large companies.

scrumpyjack
Lemon Quarter
Posts: 4816
Joined: November 4th, 2016, 10:15 am
Has thanked: 606 times
Been thanked: 2675 times

Re: Unilever (ULVR)

#474559

Postby scrumpyjack » January 19th, 2022, 8:01 pm

The FT reports that Unilever has ruled out increasing its £50bn bid after all the negative market reaction.

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Unilever (ULVR)

#474560

Postby ADrunkenMarcus » January 19th, 2022, 8:05 pm

Unilever is up 8% in New York.

And to think it was under 3500p...

Lootman
The full Lemon
Posts: 18681
Joined: November 4th, 2016, 3:58 pm
Has thanked: 628 times
Been thanked: 6564 times

Re: Unilever (ULVR)

#474561

Postby Lootman » January 19th, 2022, 8:07 pm

ADrunkenMarcus wrote:Unilever is up 8% in New York.

And to think it was under 3500p...

Yeah, I dipped my toe in again yesterday, having sold last summer, and am up 4% in a day.

Managerial incompetence can be as profitable as managerial competence.

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Unilever (ULVR)

#474573

Postby ADrunkenMarcus » January 19th, 2022, 8:48 pm

The dividend yield had hit about 4.2 percent, which is pretty high for Unilever. If I'd had the cash (easy to say, I know, but it's true), I'd have topped up.

Best wishes


Mark.


Return to “Company Share news (LSE Main Market)”

Who is online

Users browsing this forum: No registered users and 9 guests