Unilever kicks ahead with reform in buyback of preference shares

Unilever will forge ahead with the latest in a series of structural reforms announced in the wake of Kraft Heinz’s failed bid.

The consumer goods giant will acquire 97% of all outstanding 6% and 7% cumulative preference shares from two Dutch-based investors – NN Investment Partners and ASR Nederland. The company will pay €3,078 per 6% preference share and €3,262.00 per 7% preference share, plus €307.80 per 6% sub-preference share and €326.20 per 7% sub-preference share. Its ordinary stock is not affected by the buyback.

Unilever will also launch a €450 million public offering in the third quarter of the year for the remaining 3% of preference shares.

A spokesperson for Unilever said: “This represents an important step in simplifying the capital structure, which Unilever has been pursuing for many years. It will make Unilever easier to understand, and improve corporate governance by strengthening the link between economic interest and voting rights for our shareholders.”

It could be followed by further reforms aimed at proving its worth to investors in the wake of Kraft Heinz’s audacious bid. Unilever earlier released details of a €5 billion share buyback and established a net debt to pre-tax earnings ratio of 2:1 – both part of the fallout from the $143 billion approach back in February.

The Anglo-Dutch business is currently looking for buyers for its spreads business, deemed surplus to requirements, which includes brands such as Flora, Bertolli and Stork.

And it will also look at that ‘dual-headed structure’ – and whether it needs to have two separate legal entities registered in the Netherlands and the UK. That may involve delisting itself in the Netherlands as Unilever’s global headquarters are in London.

The company has today also announced the acquisition of ice cream brand Weis.