Unilever plc, the Anglo-Dutch global fast moving consumer goods (FMCG) giant, announced the closing of the open offer to increase its stake in Indian subsidiary Hindustan Unilever Ltd. (HUL).
The offer commenced on June 21, and closed on July 4. HUL shareholders tendered 319,699,278 shares during the tender period at the offer price of Rs.600 per share. This values the transaction at about Rs.19,180 crore or 2.45 billion pounds, a statement from Unilever said.
Based on the shares tendered which represent 14.8 per cent of HUL, Unilever’s stake would go up from 52.48 per cent to 67.28 per cent.
In response, on the Bombay Stock Exchange on Friday, HUL share opened 3.5 per cent higher at Rs.622.05, moved to a 52-week high of Rs.631.95 and closed at Rs.609.15; up 1.4 per cent from the previous close.
“We are pleased to have received such a good response to our voluntary open offer and that, as a result, we will significantly increase our stake in HUL, an excellent Indian business with a proud heritage and the potential for attractive long-term growth,’’ Paul Polman, CEO, Unilever, said in a statement.
Unilever will announce details of final acceptance after verification of shares tendered on July 11, and the payment will be completed in a week thereafter.
Ritwik Rai, Analyst, Private Client Group Kotak Securities, said Unilever would be fairly satisfied with the response.
“It is a higher tendering than was speculated some time ago as many thought the offer was not generous enough. There were doubts whether there would be enough interest.’’
“The offer announced was considered path-breaking as Unilever was the majority owner and the intention to increase its stake by a third was a sign that India is very important for them in the long-term,” said Sonam Udasi, Head, Research, IDBI Capital. “The size of the offer rather than the price is significant. Obviously, Unilever is taking a long-term view of India. Once it corrects, Unilever has the option of going for a creeping acquisition to up stake over the longer term,’’ Mr. Udasi said.
