Boston, MA 05/20/2014 (wallstreetpr) – The fast moving consumer goods supplier Unilever Plc (ADR) (NYSE:UL) said it agreed with the family of one of its founders to acquire rights to shares left in the family trust. The company said it spent 715 million pounds or $1.2 billion to acquire the shares.
The repurchase of the shares comes ahead of the original schedule. The shares left behind by Hesketh Lever, the founder of Lever Brothers Ltd that joined forces with Margarine Unie to form Unilever in 1930, were to convert to 70.9 million common stock shares of Unilever or 5.4 percent of the company’s equity stake at the end of 2038. However, the repurchase ahead of time is in the best interest of the shareholders.
Boosting shareholder value
Unilever Plc (ADR) (NYSE:UL) said the repurchase of rights to shares from the family of its founder will simplify the structure of the company’s stock. The move, according to Unilever CFO Jean Marc Huet, will make the company’s capital structure easy to understand. It will also help to avoid significant dilution of shareholder interest in the company.
Unilever expects the repurchase of the rights to shares held in the family trust, to boost earnings by 2 percent per year. The company said the transaction will reduce its fully diluted shares by 2.4 percent.
At 1,009 pence per share, Unilever Plc (ADR) (NYSE:UL) repurchased the shares at a price 63 percent less than the price of its ordinary shares in London on May 16, the final trading day last week.
Modeling the future
Unilever Plc (ADR) (NYSE:UL) seeks to double its business over the next few years during which it also expects to improve the life of about one billion people around the world. The company not only expects to serve many more customers than it presently does, but also reduce its carbon footprint as well as costs and expenses to maximize shareholder value. Towards reducing its carbon emissions, Unilever plans to generate 100 percent of its energy in the U.S. from renewable sources. It has already entered a partnership with a renewable energy supplier in the U.S.
