LONDON May 4 Banks are putting together around
€4bn-equivalent of debt financing to back a potential sale of
Anglo-Dutch consumer group Unilever’s margarine and
spreads business, banking source said.
Unilever hired Goldman Sachs and Morgan Stanley on the sale,
which could fetch as much as £6bn. It follows a far-reaching
review of Unilever's business prompted by February's unsolicited
US$143bn takeover offer from Kraft Heinz.
The sale is expected to attract attention from a number of
private equity firms and banks are lining up debt financings to
back any of the potential bids.
“This is a classic transaction where a sponsor can add value
as the spreads business is coming out of a huge corporate and a
private equity firm can turn it around,” a senior banker said.
Some US$4bn of debt financing equates to around 6 times the
unit’s approximate €650m Ebitda. With adjustments, one banker
placed Ebitda as high as €800m.
The size of the financing is likely to vary until it is
clear what the exact perimeters of the deal are and what is
included in the sale. Unilever’s spreads business includes
brands like Blue Band, Flora and Stork butter.
Both leveraged loans and high-yield bonds will be
considered, denominated in sterling, euros and dollars.
“From a financing perspective you can do anything, loans and
bonds in sterling, euros and dollars. It is a big business with
a lot of liquidity and a global footprint,” the banker said.
(Editing by Christopher Mangham)