A manufacturer and supplier of fast moving consumer goods, with more than 400 brands focused on health and wellbeing, 14 of which generate sales in excess of €1 billion a year. I have a holding in my income portfolio (epic code: ULVR)
Today announced a voluntary open offer to increase its stake in Hindustan Unilever (HUL), its publicly listed subsidiary in India, from 52.48% to up to 75% at a price of INR 600 per share. The potential total value of the transaction at the offer price is approximately INR 292.2bn or €4.1bn. ULVR is limited to a 75% holding if HUL whishes to retain its public listing in India.
With HUL producing earnings to 31 March 2013 of €536m, ULVR is paying 34x earnings for the additional 22.52%. This is a high price, but assumes continued strong growth from this market - earnings of HUL grew 41% in 2013. CEO Pollman describes the market as a "...significant growth potential of a country with 1.3 billion people mak(ing) India a strategic long term priority for the business..."
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