Unilever, GSK & Ben & Jerry's, Again
Stock photos of Ben & Jerry’s ice cream tubs and Marmite jars seem to be everywhere at the moment. Just as Unilever’s products cater to those with a sweet tooth as well as those with a savoury tooth (while GSK’s Sensodyne is for those sensitive teeth), its share price also seems to be catering for all tastes. Long volatility, consumer sector arbitrage and short sellers are no doubt all watching the price closely. However, it is on the long side that the situation is most interesting. Trian, a hedge fund with an absolute return activist strategy, and Unilever’s index tracking pension fund investors ordinarily live in different universes. Faced with an activist hedge fund, boards often seek to shore up support from long-term, long-only investors. With Unilever governance issues laid bare after the fallout from Ben & Jerry’s ill-considered ‘social mission’ vs the democratic sovereign State of Israel, that strategy is unlikely to be available now. In a rare dynamic, many pension funds and other long term investors might privately welcome Trian’s involvement. It takes a special kind of board to unite different flavours of shareholder, and the Unilever board may have done just that, but in the wrong circumstances. Trian’s inevitable ‘engagement’ with Unilever should therefore be understood by Alan Jope and the rest of the Unilever board as potentially reflecting the views of a far wider cross section of Unilever’s investor base.