HLL to make open offer for Bestfoods

HLL to make open offer for Bestfoods
ENS ECONOMIC BUREAU

MUMBAI, OCT 11: Hindustan Lever Ltd (HLL) has proposed to make an open offer for a 24 per cent stake held by local shareholders in International Bestfoods Ltd (IBL), which is now a 76 per cent subsidiary of parent Unilever. This follows the global acquisition of Bestfoods by the Anglo-Dutch consumer products giant.

HLL has filed an application with the Securities and Exchange Board of India (Sebi) expressing its intention to make an open offer to local shareholders for the 24 per cent stake in IBL's equity of Rs 5.25 crore, in accordance with the Sebi takeover code.

The price at which the open offer will be made, after getting the requisite Sebi approval, is Rs 173 per share -- the average price in the last six months at the leading stock exchange. The total outgo by HLL on this count will be Rs 218 crore. This forms less than two per cent of HLL's turnover, and hence is not significant, point out industry analysts.

The share price of IBL on the Bombay Stock Exchange closed on Wednesday at Rs 168.90, which is an eight per cent drop over its previous close. The HLL scrip closed at Rs 189.40, which is a marginal drop over its previous close.

The Rs 108 crore IBL was earlier the Indian subsidiary of Bestfoods which held a 76 per cent stake in the company. Unilever acquired Bestfoods globally in a $20.3 billion deal announced in June this year. The deal was recently approved by its shareholders.

While the foreign shareholding in IBL is about 76 per cent, institutional holding is a marginal 0.09 per cent. Total holding by public is 19.46 per cent, companies hold over 4 per cent and government holding stands at 0.21 per cent.