Unilever has failed to meet its buyback target in Hindustan Unilever (HUl), raising its stake in the Indian arm to 67.3 per cent for Rs 19,180 crore -- short of the intended 75 per cent -- at the end of the open offer period which closed on Thursday.
The Anglo-Dutch FMCG giant could mop up only 14.8 per cent of the targeted 22.58 per cent stake hike in the domestic subsidiary. At the offer price of Rs 600 per share, this works out to be worth Rs 19,180 crore, at an average price of Rs 601.40 a share, the london-based consumer goods major said in a statement issued from london.
HUl shareholders tendered only 3.2 crore shares, as against the target of 48.7 crore, worth $3.17 billion, or Rs 19,180 crore, during the offer that began on June 21, it said. At 14.8 per cent, the success rate of the buyback programme was around 66 per cent. The original plan was to buy back 48.7 crore shares from HUl shareholders. The offer value was 37 times HUl's earnings before interest, taxes, depreciation and amortisation (Ebitda) at Rs 600 apiece.
According to analysts, investors held back from tendering shares at that would have entailed them paying a hefty 21 per cent in capital gains tax adjusted with a Government-provided index for inflation against a paltry 0.01 per cent security transaction tax if they sell in open market.
HUl shares rose 1.4 per cent to Rs 609.15 on Friday on the BSE after rallying to Rs 631.95, up 5.1 per cent, in morning session, while the benchmark Sensex gained 0.44 per cent.