Shares in Unilever (LON:ULVR) have jumped in London today, with investors reacting positively to news that the offer for the preference shares in the group‘s Dutch subsidiary has become unconditional. The move is part of the consumer goods giant’s efforts to unlock value for shareholders which also include the sale of its spreads business.
As of 14:25 BST, Unilever’s share price had added 2.24 percent to stand at 4,180.00p, outperforming the benchmark FTSE 100 index which is currently 0.43 percent better off at 7,479.10 points. The group’s shares have added more than 21 percent to their value over the past year, and are up by just under 27 percent in the year-to-date.
Unilever announced in a statement today that its Netherlands subsidiary had declared its recommended, partial, cash offer for preference shares unconditional. The company noted that 99 percent of the issued and outstanding preference shares had been tendered for acceptance. The group said that remaining preference shares can be tendered until November 2, with the offeror to subsequently initiate statutory buyout proceedings to acquire the remaining shares.
Unilever recently launched the offer as part of its efforts to simplify its structure in the wake of Kraft Heinz’s failed takeover bid earlier this year.
Spreads unit auction update
In a separate development, sources with knowledge of the matter told Reuters this week that at least three bidders were expected to be shortlisted for the second round of the auction for Unilever’s margarine and spreads business while two other private equity groups were no longer in the fray.
A team comprising Bain Capital and Clayton Dubilier & Rice is expected to move to the second round of bidding along with private equity rivals KKR and Apollo. Buyout funds Blackstone and CVC Capital Partners, who had teamed up on a joint offer, and BC Partners, which had bid on its own, are no longer in the running.
Sources further indicated to the newswire that the process could be wrapped by the end of the year. Unilever, however, has signalled that it will spin off the business, which includes the Flora, Stork and Country Crock brands, should it fail to generate a satisfactory price through an auction.