Unilever to buy back Dutch preference shares

LONDON (Reuters) - Unilever ULVR.LUNc.AS has agreed to buy back the bulk of its Dutch preference shares and to launch a public offer for the rest, valuing them at 450 million euros, as the Anglo-Dutch consumer goods company seeks to simplify its capital structure.

FILE PHOTO: The company logo for Unilever is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 17, 2017. REUTERS/Brendan McDermid /File Photo

Fresh from defending itself against an unsolicited $143 billion (110.08 billion pounds) takeover bid from Kraft Heinz KHC.O, the Anglo-Dutch company said in April it would review its dual-headed structure, as it sought to make itself more agile, particularly with respect to big-ticket M&A deals.

Unilever said on Wednesday it had agreed terms with NN Investment Partners and ASR Nederland for the acquisition of all of their 6 percent and 7 percent cumulative preference shares in Unilever NV, the company’s Dutch-listed entity.

Analysts saw the move as a signal the company was leaning towards collapsing its structure.

“We believe the announced preference share buyback is the

first step in simplifying the shareholding structure at Unilever

NV,” said Morgan Stanley analysts in a note. “Unilever will continue the review of its dual-hedged legal structure and prefers a simplified corporate structure, which provides greater strategic mobility.”

Morgan Stanley estimated that of the 450 million euro price, 120 million euros related to accrued dividends, with 330 million attributed to the value of the shares’ voting rights.

The shares held by those two parties represent 97 percent of all the group’s outstanding 6 percent and 7 percent cumulative preference shares. They will be acquired through a public offer that would let other holders get the same terms agreed with NN and ASR.

Unilever said the offer is expected to be launched in the third quarter and settled in the fourth quarter.

Shares of the company, which separately announced the acquisition of Australian ice cream brand Weis, were up 0.3 percent on Wednesday afternoon.

Reporting by Martinne Geller; editing by Jason Neely and David Evans