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Unilever plans to spend $5.4 bn to up Indian arm stake to 75%

Anglo-Dutch consumer goods giant Unilever Plc will spend $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 on Monday.

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 8 May.

As on the quarter ended 31 March, 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.
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