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Evening Standard
Evening Standard
Business
Oscar Williams-Grut

City comment: Unilever CEO Alan Jope is walking a tightrope after GSK tilt

Unilever CEO Alan Jope

(Picture: Bloomberg via Getty Images)

Has Alan Jope got a target on his back?

The Unilever CEO was already facing pressure from disgruntled investors over the company’s plodding growth rate. This week’s shenanigans can’t have helped.

A surprise tilt at GSK’s consumer healthcare business now looks dead in the water after Unilever was last night forced to draw a line under bidding at £50 billion. It followed a disastrous share price decline as investors fretted the company was poised to overpay.

The share price has ticked up today after that announcement but is still down 5% since news of the approach first broke. There are lingering questions about Jope’s strategy.

Despite the apparent failure of the GSK bid, he appears committed to going all-in on the fast-growing markets of health, hygiene and beauty. He plans to do so through a major acquisition, dumping low-growth brands along the way. The City will get more details in a proper strategy update next month.

Reckitt Benckiser and Johnson & Johnson are mentioned by analysts as potential names on Jope’s shopping list. Investors should ask the simple question: why?

Most of the potential targets floated are already publicly listed. If people wanted to buy into them, they would. Unilever’s shareholders own it for the assets it already has. A costly, painful and likely long transformation isn’t much fun.

Jope is wobbling on the tightrope. The ground beneath him looks shaky whether he choses to beat a retreat or forge ahead.

If he does fall, he wouldn’t be the first Unilever boss to be sunk by their vision for the company. A botched effort to move the company’s headquarters to the Netherlands sunk Jope’s predecessor, Paul Polman.

A sign of things to come perhaps?

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