Unilever opens $5.4B share purchase offer for HUL at Rs 600 per share

Unilever Plc, the world’s second largest consumer goods company, has opened its voluntary share purchase offer to hike stake in the public-listed Indian subsidiary, Hindustan Unilever Ltd, on Friday. The open offer, which closes on July 4, seeks to buy shares at Rs 600 a unit, which may cost it as much as Rs 29,220 crore ($5.4 billion), if fully successful.

Unilever said on Thursday it was not raising the offer price, earlier set at Rs 600 per share, but added that it would pay the dividend of Rs 6 per share even to shareholders who tender the shares in the open offer. The annual dividend payment is to be approved at HUL’s annual general meeting on July 26, 2013.

The firm is looking to raise its stake from 52.48 per cent to up to 75 per cent if all the shares are tendered for purchase by the public shareholders.

As per listing norms, companies need to maintain at least 25 per cent free float and the offer means Unilever is not keen to make the India unit a wholly owned arm right now.

HUL shares were quoting at Rs 591.15 in early morning trades, down 0.34 per cent on the BSE in a strong Mumbai market on Friday. The open offer is being managed by HSBC Securities.

HUL, the largest FMCG company in India, has brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

The company came up with a positive financial performance for the quarter ended March 31, 2013, with 6 per cent volume growth, which was higher than the growth clocked in unit sales in the third quarter. The net profit growth also beat street estimates.

(Edited by Sanghamitra Mandal)

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