Unilever Plc has announced a voluntary open offer to increase its stake in its Indian unit Hindustan Unilever from 52.48 per cent to up to 75 per cent at Rs 600 per share.
The HUL scrip was trading up by 16.16 per cent at Rs 578 on the BSE and up by 16.21 per cent at Rs 577.95 on the NSE.
Univer CEO Paul Polman said in a statement today that the move is to strenghten Unilever’s strategy to invest in emerging markets.
“It offers a liquidity opportunity at what we believe to be an attractive premium for existing shareholders. The long heritage and great brands of Hindustan Unilever and the significant growth potential of a country with 1.3 billion people makes India a strategic long-term priority for the business,’’ he added in the statement available in the company’s Web site.
SEBI rules
The offer, which is made pursuant to the rules of the Securities and Exchange Board of India, is to acquire up to 48,70,04,772 shares representing 22.52 per cent of the total outstanding shares of HUL, which would increase Unilever’s stake to up to 75 per cent.
Securities regulations in India require a minimum public shareholding of 25 per cent for a company to maintain a public listing in the country.
Offer price
The offer, payable in cash, represents a premium of approximately 29.5 per cent over the mandatory floor price required under Indian regulations, a premium of 26 per cent to HUL’s last one month’s average trading share price and 25 per cent to the last one week’s average trading price on the National Stock Exchange.
The potential total value of the transaction at the offer price (assuming full acceptances) is around Rs 29,220 crore.
Subject to regulatory clearance, the offer period is expected to begin in June. Payment will take place shortly after the close of the offer. The offer is being managed by HSBC Securities and Capital Markets (India) Pvt Ltd.