Unilever plc (LON:ULVR) Tightens Its Belt To Lift Investors Confidence

Unilever plc (LON:ULVR) Tightens Its Belt To Lift Investors Confidence


Unilever plc (LON:ULVR) or Unilever plc (ADR) (NYSE:UL) could not afford to take things easily after rejecting Kraft Heinz Foods Co (NYSE:HZN)’s bid successfully. Now, the company is burdened with rewarding the shareholders for backing the management during the period of tense moments. More than that, the threat of being acquired continued to be there though the companies that could eye for it might be small due to its market cap of about $147.7 billion.

Therefore, as part of winning over investors’ confidence, Unilever unveiled restricting plan and would leave the shrinking spreads business. Its focus now is to boost targets on margins and lift its dividend rate besides reviewing its dual-headed legal structure. The company is keen to remove the feelings that it could grow in the immediate term too and that there is no need for outside intervention in its business.

The company believes that splitting of its food unit could allow a lot of dis-synergies besides fewer opportunities for valuation creation, according to a report in CNBC. Therefore, its focus now is a transformation of its portfolio with a realistic target. The latest move is a clear indication that the company does not want investors’ to be more concerned following the rejection of Kraft Heinz’s bid in February.

Whatever Unilever might say about the unsolicited bid of Kraft Heinz, one thing is certain. The move has woken up the management to certain reality or possibly reviews its business model in the wake of slowing growth due to a tough competitive environment throughout the world.

Unilever is one of the biggest blue-chip stocks in several countries, including Europe and India. Therefore, investors would been keen to see that the company rewards its shareholders generously at least this year for backing its management solidly.

In London, the stock is trading up 0.39 percent.