Newspaper article The Evening Standard (London, England)

Soap Sell-Off Hopes Get Unilever Fans in a Lather

Newspaper article The Evening Standard (London, England)

Soap Sell-Off Hopes Get Unilever Fans in a Lather

Article excerpt

UNILEVER'S North American and European detergent operation, which includes Surf and Radiant, could soon be up for sale with a price tag of e3 billion ([pounds sterling]2 billion).

The move would please investors, who see a natural split between the consumer group's food and household cleaning brands, and attract the eye of private-equity groups hunting fresh acquisitions.

Analysts at Swiss-based bank UBS see a sale of the soap division as increasingly likely after sensing that Unilever boss Patrick Cescau is "picking up the pace of change, particularly in terms of disposals".

In a note to clients today, analyst Alan Erskine said selling the soap division, which he argues is subscale and competitively disadvantaged, would fit in with Cescau's priorities of emerging markets, personal products and vitality.

Erskine reckons, had Unilever sold the business last year, it would have added 4% to sales growth and 2% to margins. Industrial buyers such as Henkel might also be interested.

His theory found a receptive audience, with Unilever up 2p at 1557p in a falling market.

Weakening commodity prices and falls on Asian stock markets and Wall Street saw the FTSE 100 in negative territory, off 19.7 to 6596.7.

Royal & SunAlliance led the fallers, down 7.3p at 162.4p, after saying it will tap shareholders for [pounds sterling]300 million to buy out minority shareholders in its Scandinavian arm Codan.

For the second day running, telecom stocks provided most of the excitement with strong results from Cable & Wireless, up 10p at 196.7p, and an assortment of fanciful takeover talk feeding into speculative buying.

C&W strenuously denied all talk of a takeover bid, saying any such stories are "market mischief-making" and "blatantly incorrect". Seymour Pierce said C&W's rising share price means the stock looks relatively expensive compared with BT and Vodafone and repeated its underperform recommendation.

Vodafone added 3.7p to 153.6p in heavy trading as vague talk circulated fingering AT&T as a possible buyer. Lehman Brothers has been pushing the stock, arguing it is an "attractive way to gain exposure to two of our key sector themes: accelerating fixed-to-mobile substitution and mobile-cost initiatives". …

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