Unilever to increase its share in HUL at $5.4 billion
By VJ Media Bureau | Vjmedia Works | June 17, 2013
Unilever has received approval from Securities and Exchange Board of India (SEBI), to increase its stake in Hindustan Unilever Limited (HUL) from 52.48% to up to 75%.
Unilever plans to acquire 48.70 crore shares, representing 22.52 percent stake, from the public shareholders of Hindustan Unilever at Rs.600 per share. The open offer by the London-based parent firm was at a premium of 21 percent when compared to the closing price of Rs.497.6 recorded April 29, a day before the open offer was announced. Market experts said the offer provides a good exit opportunity for retail shareholders of HUL given the attractive open price of Rs.600 in a competitive business environment for FMCG companies in India.
"We believe that the minority shareholders should tender to the open offer price of Rs.600 as the same offers an attractive exit price even in the best of the scenarios," the Antique report added. The offer price also provides an opportunity for small investors to exit from HUL and invest in other undervalued FMCG stocks, brokers said. Experts said going forward the business environment in the FMCG space will be highly competitive as the consumer sentiments remain weak and high consumer inflation puts pressure on wallets in the recent months.
This is the largest open offer so far in India amounting to Rs.29,200 crore ($5.4 billion). The offer is being managed by HSBC Securities and Capital Markets (India) Private Limited.