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LONDON, Feb 17 (IFR) - Blue chip advisers in the City of London could reap a fee bonanza of more than US$200m from Kraft Heinz’s US$143bn approach for Anglo-Dutch household goods group Unilever, which was immediately rejected.
Lazard is financial adviser to Kraft Heinz. Morgan Stanley and Centerview are acting for Unilever, alongside retained corporate brokers UBS and Deutsche.
Kraft Heinz did not disclose the terms of any transaction. Unilever said the proposal was pitched at US$50 a share, a premium of 18% to Thursday’s closing price of 3347.5p, and was a mix of US$30.23 in cash, payable in US dollars, and 0.222 of shares in the new company.
The deal is larger than AB InBev’s US$110bn takeover of fellow brewer SAB Miller, completed last year. That was another coup for Lazard, which was lead adviser to AB InBev. That deal brought in an estimated US$123m in fees for Lazard, and US277m for all the financial advisers on the deal.
Kraft Heinz was only created in 2015 via a cash and shares offer from Heinz for Kraft, valuing the latter at US$51bn. Lazard advised Heinz on that deal and Centerview acted for Kraft. The deal was financed by US investor Warren Buffett and Brazilian private equity group 3G.
The duo ended up with 51% of the resulting company and Buffett’s Berkshire Hathaway is now the largest shareholder with 26.75% stake.
Lazard’s UK head William Rucker is named as an adviser on the Unilever approach, alongside Will Lawes and Alexander Hecker in the US.
Centerview are in a prime position to advise Unilever. It has a number of consumer specialists and also boasts Nick Reid, formerly a senior M&A adviser at UBS, where the Marmite and Persil maker was a client. Reid is helped by David Krap, James Tookman in the UK and Robert Pruzan in the US.
Morgan Stanley’s team consists of Henry Stewart, Mark Rawlinson, Adrian Doyle and Anthony Zammit with Benjamin Frost in the US. The firm has built a niche as a strong bid defence specialist. HSBC has also advised Unilever on recent bond issues, with Citigroup, Deutsche and Santander.
One name missing from the roster so far is Goldman Sachs, last year’s lead M&A adviser by value of deals, according to Thomson Reuters. This year it is in fifth position on announced deals, with Morgan Stanley leading the table followed by Citigroup, Bank of America Merrill Lynch and Lazard.
After these announcements, Morgan Stanley would enhance its lead significantly with Lazard firmly in second position, followed by Deutsche, Centerview and UBS, pushing Goldman down to eighth.
Unilever rejected the offer as too low.
Kraft Heinz said it would work to reach agreement on the terms of a transaction.
A firm offer would need to be lodged on March 17 under UK Takeover Code rules. (Reporting by Christopher Spink; Editing by Steve Slater)