Business

Unilever chief calls for tougher takeover safeguards

Unilever chief executive Paul Polman Image copyright Getty Images

The boss of Unilever is calling for a strengthening of UK takeover rules to protect "national champions" after the consumer goods giant saw off a £115bn bid from Kraft Heinz.

Paul Polman said that companies should have more time to defend themselves in the event of an approach.

He told the Financial Times that there needed to be a "level playing field".

Under the UK Takeover Code, a company has 28 days to prepare a defence before a business returns with a firm offer.

The so-called "put up or shut up rule" was changed in 2011 by the Takeover Panel, the body which polices mergers and acquisitions, so that from the day a company announces it has received an approach, the business making the offer has 28 days to put forward a firm bid.

This was in response to another, but this time successful, bid by Kraft, which bought confectionery group Cadbury for £11.5bn.

At the time, it was felt it had become too easy for foreign business to buy UK companies.

Following the vote for the UK to leave the European Union, and the subsequent fall in the value of the pound, those concerns have re-emerged.

British business Arm Holdings, the chip designer, was bought by the Japanese conglomerate Softbank for £24bn.

Mr Polman said on Tuesday: "We're not talking about protection; we are saying that when you have a situation like this, with a national champion, there should be a level playing field."

The government has limited powers for intervention. Under existing laws, it can only step in when a deal threatens national security, media plurality and ownership, and financial stability.

For example, it holds a "golden share" in Rolls-Royce and BAE, two UK strategic defence and aerospace companies.

The government is examining adding "critical national infrastructure" such as nuclear power plants to the list.

The business secretary Greg Clark recently said that he would soon publish draft proposals on dealing with controversial takeover offers.

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