Rival bidders circling GSK consumer arm

GLAXOSMITHKLINE’S consumer arm could be thrust into a full-blown bidding war after it rejected three offers from Unilever at the end of last year.

It is understood Unilever is preparing a fourth offer for the business, which owns brands including Aquafresh toothpaste, and is being spun out from GSK this year.

But a leading analyst said rival bids could emerge and other consumer healthcare firms would ‘do the numbers’. Bernstein’s Bruno Monteyne said Unilever should fix its own business and that the purchase is ‘a pretty bad idea’.

He said a bidding war could attract private equity firms, but they may be turned off by the premium price after GSK rejected Unilever’s £50bn proposal. Analysts value the business at around £45bn.

GSK chief executive Emma Walmsley (pictured) is planning to list the consumer healthcare arm, which has annual sales of £9.6bn, in London, with GSK maintaining a stake. But she has come under pressure from activist investor Elliott Management to open a process to sell the unit.

Private equity firms including Advent International, CVC Capital Partners and KKR have also eyed up the business.

‘Unilever is still in the running. You would expect other consumer health companies to do the numbers,’ said Monteyne. And he warned that Unilever, which makes Ben & Jerry’s ice cream and Dove soap, would continue struggling with slow growth even if it buys GSK’s consumer arm. He said: ‘More than 80pc of Unilever would still be their old business. ‘Buying a new business isn’t going to make it more likely you fix the other 80pc plus of your business.’ He added that GSK is growing slowly and it will be hard for Unilever to boost sales. ‘They should stay focused on fixing their core business.’