Will Unilever’s shares benefit from its mooted takeover of Horlicks?

• The chart shows the Unilever share price movements since October 2017.
• 28 Nov: Unilever is in discussions to acquire GlaxoSmithKline’s nutrition business for $3bn.
• The key to the deal is the Horlicks brand, a malted-milk drink that is popular in India.
• The deal could be completed in the coming weeks.
• Shares now at 4262p (at time of writing)
• Will Unilever shares benefit from from its new exposure to the large Indian market?
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Unilever – An Example

Let’s say you think that Unilever is likely to rise further as a result of this takeover offer, towards August highs around 4500p. You decide to buy exposure to £10,000 worth of IWG using a CFD, at the current price of 4262p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Unilever share price rises by 15%. Your profit would be £1500, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Sentiment towards a deal turns sour and Unilever shares fall 7% and hit your stop-loss. Your loss would be £700.

This is provided for information purposes only. It should not be taken as a recommendation.