Kraft and Unilever

Arazi · 20 Feb 2017 at 19:49

Dis86 said:
Whoa, that was all a bit uncalled for!

Sorry Dis

Arazi · 20 Feb 2017 at 19:54

dowie said:
Yup, insider trading is investigated and occasionally prosecuted.

I'm not sure what 'doesn't smell right' in this instance?

It is pretty standard for the shares of a company being targeted in a potential takeover to jump, you'll also see the share price of the company instigating the takeover fall. Generally the price will rise to a point a bit below the bid from the company instigating the takeover. In this case IIRC Kraft was bidding £40 and the shares jumped to £38 or so... the difference between the price they're trading at at that point and the price Kraft is offering reflects the market's assessment of the chance of the deal going through.

If you believe the deal will go through then a simple example of a trade would be to go long(buy) Unilever and short (sell) Kraft. On the other hand if you believe the deal will fail you could do the opposite.*

And as we saw, when it fell through, Unilever shares fell and Kraft shares rose.

I know Dowie it was just the way it was done, completely out the blue and then over with over the weekend, these things generally start with rumours and then the process drags out for a while, but this one was to quick, for me anyway.

I don't have a clue really when it comes to dealing in shares etc so take my posts on this as BS

Dis86 · 20 Feb 2017 at 19:56

Arazi said:
Sorry Dis

Lol not you. Just the whole random berating thing.

Arazi · 20 Feb 2017 at 19:57

dowie said:
I got quoted by him repeatedly for a page in SC after mentioning something negative about Obama...

What about Trump...

What about Trump...

What about Trump...

Even though I'd made it quite clear I also thought Trump was bad and considered Bill Clinton the least worst. I don't quite understand it, seemingly if we're going to criticise something these days we need to add a disclaimer that yes Trump is also pretty bad.

I'm glad I'm not the only one then

Arazi · 20 Feb 2017 at 19:58

Dis86 said:
Lol not you. Just the whole random berating thing.

Oh, hahaha, ignore me

Scania · 20 Feb 2017 at 22:42

If you saw Unilever from the supply chain side, as I do, you'd knock off a few £/$, not put it on!

Farcical organisation at so many levels compared to say Procter & Gamble....

ubersonic · 21 Feb 2017 at 09:04

Arazi said:
Do any watchdog kind of organisations look at this kind of dealing.

Yeah, in the UK we have the Financial Conduct Authority, in the states they have the The Securities and Exchange Commission.

The Geezer · 21 Feb 2017 at 09:37

I'm not going to worry about it too much. I would guess most of our pensions providers have investments with these big players (Kraft & Unilever) so it's a small win for us even without any insider dealing flags

antijoke · 21 Feb 2017 at 09:50

It's like being back in the schoolground in here, but with adult themed topics instead of what character lunchbox you have.

Arazi · 21 Feb 2017 at 12:31

ubersonic said:
Yeah, in the UK we have the Financial Conduct Authority, in the states they have the The Securities and Exchange Commission.

Thanks, would they look into this?

englishpremier · 21 Feb 2017 at 16:50

Arazi said:
I am not sure if anyone else has thought this but Kraft throw in a bid to by out Unilever, Unilever share price jumps up, 3 days later Kraft pull out.

Now who is making profit here, something doesn't smell right with this, Unilever shares went from ~ $42 to ~ $49.

Me only a small one but profit nonetheless. Thank you Kraft.

Arazi · 21 Feb 2017 at 17:08

englishpremier said:
Me only a small one but profit nonetheless. Thank you Kraft.

Well done.