Is this FTSE 100 stock ripe for takeover after Unilever plc bid is rejected?

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Unilever sign

Unilever (LSE: ULVR) has announced an end to the discussions regarding its potential takeover by Kraft Heinz. This is a relatively swift decision by the company, since investors were only told of a possible merger between the two companies part-way through Friday's trading session. Looking ahead, another bid for the company cannot be ruled out. But, is there another FTSE 100 stock which is now an even more likely bid target?

A low offer?

Unilever's quick response to the idea of a merger between the two companies indicates that the offer was substantially below its own valuation. Although Kraft Heinz has apparently now walked away from the idea, it seems unlikely that it would give up after just one offer. Normally, a combination of this size and scale would see a prolonged period of negotiation which may see one or more offers rejected. Certainly, Unilever may not see the value in a combination between the two companies, but if the price was deemed fair value by its management team, it could lead to a deal.

Bright future

The attraction of Unilever to Kraft Heinz is fairly obvious. It has a product stable which includes some of the world's strongest brands. It has arguably been ahead of most of its consumer goods peers regarding emerging market growth potential. It has invested heavily across Asia in particular in recent years in order to generate the majority of its revenue from developing markets. This means that it potentially has superior long-term growth prospects when compared to its sector peers. As such, it would be unsurprising for Unilever to be the subject of one or more bids from Kraft Heinz or elsewhere in future.

Another takeover approach?

Of course, Unilever isn't the only FTSE 100 stock with bid potential. B&Q owner Kingfisher(LSE: KGF) could be the subject of a bid approach, since its current strategy is set to rejuvenate its bottom line. In the next financial year its earnings are due to rise by 11%, which puts it on a price-to-earnings growth (PEG) ratio of just 0.7.

Furthermore, it has a historic price-to-earnings (P/E) ratio of 14.9. However, it currently trades on a P/E ratio of 13.3. Assuming a reversion to its average P/E ratio and performance which is in line with forecasts, Kingfisher's shares could be worth 425p by 2019. That's 30% higher than their current level.

Certainly, the outlook for the UK and French economies is somewhat uncertain. Those being the company's key markets means they may act as a drag on its performance. But, with a sound balance sheet and effective strategy, as well as a low valuation, Kingfisher could become the subject of a bid approach. That's made even more likely by sterling's weakness, which makes it even cheaper to a foreign suitor. As such, it could be an even more likely takeover than Unilever at the present time.

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Peter Stephens owns shares of Unilever. The Motley Fool UK owns shares of and has recommended Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.