Consumer Products and Services

Unilever should have one boss – not two

7 May 2004

The AngloDutch food giant is reforming its doubleheaded structure. But only a bit. It should go the whole hog. It s not as if having two bosses has pepped up its performance. Quite the reverse.

P&G backtracks on Wella stand-off

27 Apr 2004

It's offering preference shareholders 12% more to bring them into a domination agreement it says it never needed in the first place. Yet the price it's offering won't put an end to its legal wrangles, though it's guaranteed to anger supportive shareholders in the process.

LVMH driven by LV brand

3 Mar 2004

The group s trusty engine even speeded up in the second half of the year, with dollar sales growth of more than 50% in Q4. A luxury rebound may finally be underway. But LVMH which is up more than 50% in the last year is already pricing a hefty one in.

L’Oreal hangs on to growth target by fingernails

20 Feb 2004

Strip out Sanofi s contribution, hedging gains and the reintegration of provisions, and the picture looks a lot less rosy. With L Oreal s core business trading at 30 times this year s earnings, the premium to rivals looks too steep.

Stodgy Unilever rings the changes

12 Feb 2004

Another AngloDutch doubleheaded monster disappoints. But unlike Shell, Unilever seems willing to change. Chairman Niall Fitzgerald is leaving early and the company plans to move to a unitary board structure.

Reckitt does embarrassingly well

11 Feb 2004

Revenues and margins are growing rapidly at the household products group. At 17 times earnings, the stock looks a buy. Reckitt s cash pile is also growing embarrassingly fast. Its £250m buyback programme isn t enough. It should be closer to £400m.

Henkel in $3bn Dial purchase

15 Dec 2003

That's a lot to pay for the lowgrowth US soap maker, which has been on the block for donkey's years. Indeed, including debt and few synergies, Henkel's return on investment at 5.5% is pretty unexciting.

Nestle shooting straight for growth target

23 Oct 2003

Unlike rival Unilever, the Swiss foods group is on track to hit its 56% annual growth target. But Nestle is relying on just a couple of key units for growth. Nestle would do well to inject some innovation into its brands.

Allianz sells E4.4bn Beiersdorf stake to Tchibo

23 Oct 2003

This allGerman stitchup suits Tchibo, Beiersdorf management, Allianz and other insiders. But outsiders are shortchanged. The company s decision to buy 7.4% of its own shares to help thwart a takeover by P&G is particularly reprehensible.

Minorities may be stranded in Germany, again

13 Oct 2003

Beiersdorf s minority shareholders are likely to be left out in the cold if current shareholder Tchibo Holdings buys up Allianz s 44% stake. This wouldn t be the first time minorities in Germany got a raw deal. The country s reformed takeover rules have proved insufficient.

Reckitt returns cash but keeps powder dry

26 Aug 2003

The household products group is achieving this juggling act by virtue of the fact that it has net cash on its balance sheet. Shareholders could have demanded more but they will probably give Reckitt the benefit of the doubt. It must use this trust wisely.

Don’t expect rapid decision on Beiersdorf’s future

14 Aug 2003

There may be a willing seller in the form of Allianz and a willing buyer in Procter & Gamble. But the intentions of Tchibo, which has a blocking stake, remain unclear.

Unilever laments dead hand of fund management

6 Aug 2003

Democratic capitalism relies on the exercise of voting rights. Investors who don't bother voting are failing in their fiduciary obligation. If European institutions don't rectify this, they may see the imposition of costly rules similar to those recently mandated by the SEC.

Boots interested in SSL

16 Jul 2003

The UK chemist is facing a hard time finding growth opportunities and a bunch of ventures have ended in disaster. The condom and footcare business could be a decent strategic fit. The worry is that Boots could end up overpaying.

Reckitt flirts with condom-maker SSL

14 Jul 2003

For a company that makes condoms, there's not much about SSL that is sexy except its price. Even after Monday's bounce, Reckitt would only need to cut 20% of SSL's costs to make a decent return on the investment.

P&G claims victory in Wella standoff

27 Jun 2003

The consumer products giant acquired enough of the German shampoomaker's shares to exercise the tax benefits of the deal. Curiously, the deciding factor for P&G was the sale by rival Henkel to tender its Wella shares. Why would it give P&G such satisfaction?

Some Wella shareholders hold out

21 May 2003

P&G may have a longterm tax incentive to squeeze out minorities, but it can easily manage with less than 95% of the capital. Preference shareholders who don't tender will be left with an illiquid security, and a dividend savaged by P&G.

Unilever disappoints

2 May 2003

The consumer giant's stock is down on slow firstquarter growth. Sales of food brands more than half the total stagnated. Investors are punishing Unilever for raising expectations with cheery guidance. But it's too soon to decide that the group is off course.

P&G improves Wella preference offer – a tad

28 Apr 2003

The consumer products giant is keen to buy off an awkward squad of arbs who hold Wella nonvoting stock and could complicate the takeover. Bunging them an extra E80m in the context of a E6.6bn deal is small beer. Snag is that it is so small that it may not work.

P&G bids E6.5bn for Wella

18 Mar 2003

At 13.3 times ebitda, the price is steep. Synergy forecasts barely cover the E1.8bn premium to prebid speculation values. And P&G may need to spend more to bring preference shareholders on board before the deal is won.