Takeover target Bestfoods’ highly public game of cat and mouse with its European suitor Unilever is apparently starting to leave a sour taste in the mouths of Bestfoods’ investors.

Bestfoods, the maker of such well-known household brands as Skippy peanut butter, Hellmann’s mayonnaise and Knorr soups, is reportedly mulling a new and improved $20.5 billion offer from Unilever, while at the same time negotiating to purchase Campbell Soup Co. for $15 billion.

Bestfoods’ board was to meet Monday night to consider the company’s options, according to several reports.

Company spokesmen at Bestfoods, Unilever and Campbell all declined to comment Monday.

A month ago, Bestfoods rejected an unsolicited $18.4 billion — or $66 a share — offer from Unilever, which owns Lipton teas, Vaseline, and Pepsodent toothpaste and which recently bought Ben & Jerry’s ice cream business. At the time, Bestfoods officials said the Unilever offer was too low and that Bestfoods preferred to remain independent.

Unilever is believed to have raised the offer over the weekend to $72 a share.

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By GlobalData

News of Unilever’s original offer had investors scrambling for Bestfoods stock. Shares of the Englewood Cliffs, N.J.-based company rose to a 52-week high of $66.188 last week, up from around $50 prior to the Unilever bid.

But as the courtship has taken on soap opera proportions, Bestfoods’ stock has begun to slide, and analysts believe company officials have confused investors by sending mixed messages.

Bestfoods stock fell 3 percent, or by $1.938, to $63 on Monday on the New York Stock Exchange, the second straight session in which the shares have fallen. On Friday, the stock fell $1.375 despite a broad rally among blue chip stocks.

Unilever’s U.S. shares rose 56.25 cents to $50.375, while Campbell Soup gained $1.187, or 4 percent, to $31.125 on the NYSE.

Since rejecting Unilever’s original offer, Bestfoods was widely rumored to be in negotiations to sell all or part of its operations to Diageo PLC, owner of Pillsbury baking products.

Now reports have surfaced that Bestfoods is close to acquiring long-ailing Campbell Soup.

But most Wall Street analysts who follow the company say the match doesn’t fit, and that Bestfoods is probably using the Campbell Soup speculation as a bargaining ploy to extract a higher offer from Unilever.

Six months ago, a Bestfoods-Campbell Soup combination might have made sense, said Janney Montgomery Scott analyst Mitchell Pinheiro.

Bestfoods’ soup products could have gotten a boost from Campbell Soup’s distribution system, he said. And Cambpells Soup’s Pepperidge Farm line of baked good would have blended well with Bestfoods baked goods.

But a merged Bestfoods and Campbell Soup company is unlikely to be worth $72 a share for many years, if ever, according to Pinheiro.

From a shareholders standpoint, a combined Bestfoods-Campbell Soup “pales in comparison” to Bestfoods accepting Unilever’s offer, Pinheiro said. “Seventy-two dollars a share in hand is a more favorable proposition for Bestfoods shareholders than a merger in the bush,” he said.

Some observers believe Bestfoods management will have trouble justifying to shareholders objections to an offer of more than $70, and that the pressure is mounting on company officials to accept an offer.

It’s probably just a matter of time before Bestfoods accepts a more attractive offer from Unilever, Donaldson Lufkin & Jenrette analyst William Leach said last week. “I think they’ll get them sooner or later,” he said.

At upwards of $70 a share, the deal would surpass the $20 billion range, far greater than the last major food acquisition, the $5.8 billion purchase of Pillsbury Co. by the British distiller Grand Metropolitan in 1988. Grand Metropolitan PLC and Guinness PLC merged in 1997 to form Diageo.