Anglo-Dutch consumer goods giant Unilever Plc will spend USD 5.4 billion (over Rs 29,380 crore) to hike stake in its Indian arm Hindustan Unilever to 75 per cent through an open offer.
Unilever will pay Rs 600 a share in an open offer to raise its stake in Hindustan Unilever to 75 per cent from the current 52.48 per cent, the company said in a filing to the stock exchanges.
The price is 21 per cent higher than the stock's closing price of Rs 497.35 yesterday.
The world's second-largest consumer goods company "is making a voluntary open offer to acquire 48,70,04,772 shares representing 22.52 per cent of the total Voting Share Capital from the public shareholders of Hindustan Unilever Ltd", it said.
HSBC Securities and Capital Markets India, the manager to the offer, said the completion of the open offer is subject to receipt of statutory approvals and details of the offer would be published on or before May 8.
As on the quarter ended March 31, 2013, the promoters of HUL have a total stake holding of 52.48 per cent.
Market analysts termed the development as a good opportunity for investors to encash.
"The company is now doing well and they have found their growth track in businesses they are in. Investors should tender their shares at the open offer price," Motilal Oswal Financial Services Director & Co Founder Raamdeo Agrawal said.
Unilever has been focusing on emerging markets, including India, China and Brazil, for its growth apart from Africa as growth has been slowing in developed markets like Europe.
The company's Chief Operating Officer Harish Manwani had in March pointed out rural India as one of the biggest opportunities to tap for growth.
"Rural India is one of the biggest opportunities in the world because it is the place where 700 million people live," Manwani had said.
Earlier 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 th Indian arm to its parent will increase to 3.15 per cent of turnover by the financial year ending March 31 2018.
Earlier, HUL was paying a royalty of 1.4 per cent of the turnover.
The agreement became affective from February 1, 2013.
Shares of HUL were trading at Rs 583.10 apiece, up 17.18 per cent from their previous close on the BSE.
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