Unilever Fails to Raise Stake in Hindustan Unilever to 75 Percent

on Jul 5, 2013
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iNVEZZ.com, Friday, July 5th: Unilever Plc (LON:ULVR, AMS:UNA) has failed to increase its majority shareholding in Hindustan Unilever Ltd (NSE:HINDUNILVR, BOM:500696) to 75 percent and ended up with a stake of two-thirds after some shareholders of the India-based company decided not to sell. Unilever’s share price was little changed in morning trading in London and Amsterdam today, whereas Hindustan Unilever’s share price gained more than one percent in Mumbai.

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**Unilever Falls Short on Public Offer for Hindustan Unilever**
London- and Rotterdam-based Unilever, the multinational consumer goods company, yesterday announced in a statement that shareholders of Mumbai-based Hindustan Unilever had tendered 319.7 million shares to a voluntary tender offer, taking Unilever’s holding in the unit to 67.28 percent from 52.48 percent. Unilever said that it had paid 600 Indian rupees per share, which is valuing the transaction at about €2.45 billion (£2.1 billion).

Earlier this year, Unilever said that it was planning to pay up to $5.4 billion (£3.6 billion) to increase its stake in Hindustan Unilever to as much as 75 percent. As Bloomberg noted, the outcome of Unilever’s public offer could force the company, one of the world’s leading suppliers of food, home and personal care products, to pay more for a bigger stake later.

“The potential of India’s consumerville is rightly regarded as huge, and Hindustan Unilever is the de facto play in the space,” noted Jon Cox, an analyst at Kepler Capital Markets SA, as quoted by Bloomberg. The Indian company generated over 38 billion rupees (or £0.4 billion) in net profit for the financial year ended 31 March 2013.
Unilever said in the statement that payment for the shares would be completed on or before July 18.

**“Clear Win”**
Unilever has been trying to increase its presence in faster-growing emerging markets such as India to counter slower growth in Europe. Developing markets would account for more than 90 percent of the company’s annual sales growth this decade, according to Bloomberg. The newswire quoted Vivek Veda, a consumer analyst at Espirito Santo Securities, as saying that the result of the offer was “a clear win”

for Unilever.
!m[Unilever’s Share Price Little Changed in European Trading](/uploads/story/3710/thumbs/pic1_inline.jpg)
“I think they got more than what the market expected,” Veda noted, adding that the deal would also “help bring in dollars into the country and ease pressure on the rupee, at least for the time being”.
Unilever spokeswoman Lucila Zambrano said that the company had no plans for a future offer.
**Unilever’s share price was 0.23 percent up at 2,747.30p in London as of 09:54 BST. In Amsterdam,
Unilever’s share price was 0.05 percent up at €31.12.**
**Hindustan Unilever’s share price was 1.21 percent up at 608.00 rupees in Mumbai as of 14:28 IST and 1.08 percent up at 607.90 rupees on the National Stock Exchange of India.**

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