Lord Paul Myners urges takeover crack down as Unilever eyes £6bn sale of Flora and Stork division

Former City minister Lord Myners has weighed into the debate over the UK’s takeover regime, urging the government to toughen up the rules to protect prized companies from foreign bidders.

His comments come days after Unilever boss Paul Polman called for the takeover code to be strengthened in the wake of a shock £115bn approach from Kraft Heinz, the first ever major threat to the Anglo-Dutch giant’s independence. 

Writing exclusively for the Sunday Telegraph, Lord Myners, who led Marks & Spencer's defence against Sir Philip Green's acrimonious bid while chairman of the chain, hit out at Theresa May for failing to step in to “protect prize assets”. Companies such as Unilever that employ thousands of people in the UK should be shielded from “opportunistic dealmakers” seeking a quick way to deliver short-term shareholder value, he said. 

“The UK’s takeover rules are the most permissive in the world. They do nothing to discourage the likes of Kraft Heinz seeking to buy businesses to turn a quick profit. Does the Government really believe this constant garage sale is good for the national economy and society at large?”

With debt “freely available and “sterling assets cheap”, unless the UK’s “permissive” regime was strengthened with the introduction of a national interest test, Myners predicted that five FTSE-100 companies would be on the end of bids in 2017. Companies should be given more time to erect their defences and bidders should be forced to obtain shareholder approval for all mergers, he argued.

His broadside comes as hungry buyout barons eye £6bn offers for Unilever’s Flora, Bertolli and Stork brands. The FTSE-100 personal goods and food manufacturer has been forced onto the defensive following Kraft Heinz’s approach and is now weighing the sale of its margarine spreads business.

There has been speculation that Polman could respond by moving for another rival such as Colgate-Palmolive, or spinning-off its entire food arm. However, his next move is likely to be more measured. 

A sale of the non-core margarine division, which controls just under a third of the entire global margarine market, is now top of the agenda, along with an escalation of its cost-cutting programme. Unilever is planning to boost shareholder payouts through buybacks or dividends. The results of the strategic review are expected to be unveiled in the coming weeks.

Sources said private equity titans Bain Capital, CVC and Clayton Dubilier & Rice, have already started working on offers. Kraft Heinz is also tipped as a possible buyer.

The future of the division has been the subject of regular speculation after Unilever made it a standalone entity in 2014 with separate accounting and management.. It generates around £480m in earnings - 4pc of Unilever’s entire revenue.