After reaching a 52-week low on its failed bid to acquire the consumer unit of GlaxoSmithKline (GSK-1.1%), Unilever (UL-0.2%) ADRs rebounded Wednesday as the company ruled out raising the bid any further.
Commenting on the development, UBS analysts led by Guillaume Delmas see Unilever’s (NYSE:UL) announcement as an attempt “to regain control of the narrative” and end the sharp volatility seen in its share price over the past three days.
The deal for the division where Pfizer (NYSE:PFE) holds a minority stake is unlikely to happen, they added.
Given that GlaxoSmithKline (NYSE:GSK) previously rejected £50B bid in December, citing the undervaluation of the unit and its prospects, “we now see the probability of Unilever acquiring GSK Consumer Health as particularly slim,” the analysts wrote. UBS has a Sell rating on Unilever (UL) with a price target of 3,700 pounds, implying only a ~1.2% premium to the last close.
Read why Bank of America said that the offer made by Unilever (UL) is unlikely to generate upside for the U.K. pharma giant.