Unilever makes a voluntary open offer to increase stake in HUL - Angel Broking

HUL's promoter Unilever PLC has decided to make a voluntary open offer to buy 22.52% stake in the company at an offer price of Rs. 600/share. Unilever currently holds 52.5% stake in HUL and it proposes to take its total stake in the company to 75%, which is the maximum permissible promoter holding limit in a listed company.

As per the Unilever's CEO Paul Polman, the US$5.4Bn deal represents a further step in Unilever's strategy to invest in emerging markets and offers a liquidity opportunity at an attractive premium for existing shareholders. Currently, more than 50% of Unilever's total turnover comes from emerging markets such as India, Brazil, Indonesia, Turkey, South Africa, China etc. India contributes ~7% of Unilever's total turnover.

In our view, this move by Unilever indicates the huge confidence it has over the potential of India's consumer sector. At the CMP, HUL trades at 32x FY2015E, which we believe is fair. We maintain our neutral rating on the stock.

Source : Equity Bulls

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