Shares in Unilever (LON:ULVR) have gained ground in London this morning as the company launched an offer for the preference shares in its Dutch subsidiary. The move is part of the group’s efforts to simplify its structure as it looks to unlock value for shareholders in the wake of Kraft Heinz’s failed takeover bid earlier this year.
As of 09:29 BST, Unilever’s share price had added 0.73 percent to 4,404.50p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.03 percent worse off at 7,535.64 points. The group’s shares have added more than 17 percent to their value over the past year, and are up by more than a third in the year-to-date.
Preference shares offer
Unilever announced in a statement this morning that its Netherlands subsidiary had launched a recommended, unconditional and irrevocable partial cash offer for all six-percent and seven-percent cumulative preference shares in the capital of Unilever N.V. Upon completion of the offer, expected on October 25, the company will initiate statutory buyout proceedings to acquire any remaining preference shares, and terminate their listing on Euronext Amsterdam.
“The Offer represents an important step towards simplification of Unilever’s capital structure and improving corporate governance by strengthening the link between economic interest and voting rights for shareholders,” the company noted in the statement.
Unilever unveiled plans to buy its Dutch preference shares earlier this year, saying at the time that the move will make the company ‘easier to understand,’ and improve corporate governance. The Anglo-Dutch giant is dual-listed and has two parent companies, in the Netherlands and in the UK.
Unilever has further pledged to sell or de-merge its spreads business as part of its efforts to unlock value for shareholders and has reportedly invited private equity bidders to submit offers for the division by October 19.