Does this reflect investor confidence in Unilever going its own way, or hope that some kind of deal - perhaps a sell-off of its food business - can be done? There are many explanations of this mega-deal-that-wasn't.
Economic nationalism is alive and well
Across the pond, President Trump has used his bully pulpit - his Twitter account - to warn quintessentially American companies such as car maker Ford (US:F) against expanding overseas operations. Mr Trump has expended much effort presenting himself as the defender of US workers, though some cases provide little more than good initial headlines: the production intended for the nixed Ford factory will reportedly be shifted elsewhere within its Mexico operations.
Our prime minister, Theresa May, was explicit in her leadership launch speech that her administration would be ready to "step in" to protect core economic sectors against potentially job-destroying acquisitions. Chocolate maker Cadbury's purchase by Kraft was explicitly cited. Yes, Unilever only has around 8,000 of its 170,000 employees in the UK, but remains our third-largest public company by market value and an important actor in domestic consumption.
Perhaps it is Mrs May, rather than Mr Trump, who has scored an early victory for economic nationalism. But globalisation cuts both ways, and higher walls will impact our own corporate titans that seek cross-border growth.
Synergies: in the eye of the beholder
The target's board was categoric that it saw in the deal "no merit, either financial or strategic, for Unilever shareholders". But from the perspective of the deal's proponents, Unilever's emerging markets footprint was seen to complement Kraft Heinz's US share, while the former was also seen to benefit from a tougher approach to costs. Compare Unilever's operating margin of 15 per cent from its recent full-year results with the 23 per cent achieved by its smaller US rival.
But the overlap between the companies is not huge: food accounted for just €12.5bn (£10.6bn) out of the €52.7bn revenues that Unilever generated last year. And ripping costs out of the combined business would have had political risk, as discussed. The Anglo-Dutch company's challenge now will be to demonstrate that its drive to improve profitability will provide better value than selling this division.
What price a bond proxy?
For the large number of Unilever investors who view the company's shares as a bond proxy, a takeover premium would have to be substantial. As one Hargreaves Lansdown (HL.) fund manager, Steve Clayton, said in response to the initial bid: "A short-term premium today is no compensation for losing the growth that Unilever could produce for decades to come."
But the higher the premium, the more of a balance sheet stretch for the smaller company to buy the larger one, and given the part-share nature of the deal, this was clearly a difficult sell for Unilever shareholders.
Timing the market
The company has said the early leak of the deal, a great scoop for the market-watchers at our sister title, the Financial Times, made it more difficult to win hearts and minds. This is no doubt true, but ultimately the Unilever board and shareholders would probably have come to the same conclusion.
This looks like a deal for the sake of a deal, part of the trend towards global concentration of profits where the longer-term benefit for longer-term shareholders is less clear. But for a company with challenges in its growth markets, Unilever must now demonstrate progress in its operational strategy, and convince shareholders that acquisitions such as male grooming start-up Dollar Shave Club provide long-term security.
