Unilever Plc launches open offer for Hindustan Unilever shares

Unilever Plc today launched its expected open offer to increase its stake in its Indian arm Hindustan Unilever Ltd. The offer will remain open till 4 July.

In a statement from London, the company said the open offer price is fixed at Rs600 apiece, but added that the company will offer a Rs6 bonus per share.

Currently, Unilever, the Anglo-Dutch fast-moving consumer goods (FMCG) multinational holds 52.48 per cent in HUL; and after the open offer it will go up to 75 per cent.

Unilever had said on 30 April that it would spend in $5.4 billion (Rs29,400 crore) to hike its holding in HUL. The offer price of Rs600 a share was 21 per cent higher than HUL's closing price of Rs497.35 the previous day, when it had announced its annual results.

The world's second-largest consumer goods company "is making a voluntary open offer to acquire 48,70,04,772 shares representing 22.52 percent of the total voting share capital from the public shareholders of Hindustan Unilever", Unilever said.

HSBC Securities & Capital Markets India is the manager to the offer.

In January this year, Unilever had decided to hike royalty fees from HUL. As per an agreement between HUL and Unilever for the provision of technology, trademark licences and other services, royalty payment by the Indian arm to its parent will increase to 3.15 percent of turnover by the financial year ending 31 March 2018.

Earlier, HUL was paying a royalty of 1.4 per cent of the turnover. The agreement became affective from 1 February 2013.

In the March quarter, HUL has reported a 15 per cent rise in net profit at Rs787 crore, while for the full year, its profit rose to Rs3,829 crore, an increase of a whopping 37.20 per cent as against Rs2,790.66 crore in 2011-12, while net sales for 2012-13 rose to Rs26,317.15 crore from Rs22,987.73 crore in the previous fiscal.

Subject to approval of the final dividend of Rs 6 per share recommended by the HUL board for the FY13, and of the annual general meeting slated for 26 July, the shareholders who tender their shares in the open offer will be entitled to receive the final dividend in respect of the shares tendered by them, the statement said.

HUL shares closed flat on Thursday but with a negative bias at Rs 593.15, a fall of 0.27 per cent, on a day when the Sensex tanked 2.74 per cent or 526.41 points to 18719.29.