Interesting that HUL closed over Rs 600 on the last day of Open Tender at Rs 600 by Parent Unliever

2 Comments / FMCG, Inspiring and Motivating, Interesting News Sightings, Investing Approaches, Investing Themes, INVESTOR MISTAKES, Open Offers & Buy Backs, Reflections, Sectors, STOCKS, VALUATION / By

Interesting that HUL closed over Rs 600 on the last day of Open Tender at Rs 600 by Parent Unliever

Had opined two months ago on May 8, 2013 on a detailed post on my company website that Shareholders should not tender at Rs 600 in the Offer by Parent Unilever

Unilever to try increasing Stake in HUL to 75% ~ Why? and should Shareholders support the Open Offer at Rs 600?~ 08-May-2013

Let’s see if HUL price will fall back below Rs 500 from where it shot up after the Open Offer was announced by Unilever a few months ago 

My long term sense is that HUL will ultimately climb towards Rs 1000 inside  four years on purely on Valuation ~ check out the above link on my website which spells out why we advised HUL Shareholders not to sell therir Shares to Unilever at Rs 600 

Not a Fully Successful Open Offer

The Parent, Unilever Plc, together with direct & indirect subsidiaries holds 52.47% of the Equity of HUL,precisiely 1,134,849,460 ~ Therefore Non Promoters hold 47.53% or precisely 1,025,150,540 shares ~ LIC holds 3.22%,Oppenheimer Developing Markets Fund holds 1.76% and Virtus Emerging Markets Opportunities Fund holds 1.44%)

The Open Offer was for a maximum of 487,004,772 shares of the Non Promoter Holding of 1,025,150,540 shares => 47.51%

If it had been  fully successful this would take  the parent Unilever stake in HUL from 52.47% to 74.99%

Therefore if all Non Promoter Shares had tendered for the Open Offer the Acceptance Ratio would have been  only 47.51 % or near to One for every Two Shares tendered as all shares would not have been accepted

The Acceptance ratio obviously would have gone  up if the Shares Tendered for the Open Offer were  less than 1,025,150,540 that could have been tendered

However all Shares tendered will be accepted as First and Early Reports after July 4,2013 Closing yesterday is that the Open Tender has not even attracted the 487,004,772 Shares sought ~ only 2/3rds of @ 33 cr shares have been offered by non promoter shareholders.This would mean Unilever would be able to raise stake to only @ 67 %  instead of the 75% they had wanted to ~ The Tender Size therefore drops to @ US $ 3.2  billion Deal  from @ US $ 4.9 b at Rs 60 to the US $