Unilever has declined to comment on a report suggesting the company is considering splitting in two, spinning off its food business – including brands like Knorr and Hellmann’s – from its home and personal care units.

According to The Sunday Telegraph, Unilever is understood to be giving what the newspaper called “serious thought” to a spin-off of its food business into a separate listing.

The newspaper also said the possibility of Unilever’s operations being divided is supported by some of the group’s larger shareholders.

“A spin-off makes sense on paper and if the management can make it work then we would be sold on that. It would be the most palatable option,” said Matthew Tillett, fund manager at Allianz, the 14th largest holder of Unilever’s Dutch shares, told The Sunday Telegraph

Unilever last week launched a strategic review into its business in order to “accelerate” the value it can give to its shareholders. The move came days after a Unilever rejected a takeover approach from Kraft Heinz, which the US food giant then withdrew two days after it became public

A spokesperson for Unilever declined to comment on the review when contacted by just-food today (27 February). The findings of the review are due to be published in April. 

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Speaking on Friday at the Consumer Analyst Group of New York conference in the US, Unilever CFO Graeme Pitkethly revealed the review will include an evaluation of the company’s portfolio. 

“This will include options for our organisation, our portfolio, our cost structures and for our balance sheet and use of cash,” Pitkethly said. “We will complete the review, with the board, by early April and then will announce our conclusions. No doubt the coming weeks will include a [lot] of speculation and commentary on the possible outcomes. I am sure you would appreciate it would be quite wrong of me to anticipate the outcome.”

While Pitkethly insisted the Kraft Heinz offer undervalued Unilever, he conceded it represented an “inflection point” for the group to evaluate its long- and short-term value creation priorities. 

“Looking forward the Kraft [Heinz] bid certainly highlights the importance of getting the balance right between long-term sustainable value creation and short-term value delivery. It creates an inflection point. We believe that we can do more to communicate the value creation from our existing plans.”

Pitkethly also claimed the implementation of Unilever’s so-called Connected 4 Growth programme – devised to make the business simpler and more agile – and the company’s use of zero-based budgeting meant the Magnum owner could up its forecast for 2017 margins. “We can now raise our guidance for this year to the upper end of that 40-80 [margin improvement] basis point range.”

Reflecting on what could be the outcome of Unilever’s operational review, MainFirst analyst Alain Oberhuber said: “We assume that Unilever’s CEO, Paul Polman, will be willing to accelerate corporate activity in order to improve earnings growth and ROIC, i.e. the potential divestment of its spreads and Hellmann’s business or even a merger with another HPC company and divestment of Unilever’s entire foods business. Obviously, all options are open as the Kraft Heinz offer was a wake-up call for Unilever.”