Shareholders block Unilever’s bid for overriding stake in Unilever Nigeria

 Nigerian shareholders largely shunned a N43 billion share-acquisition bid by Unilever Overseas Holdings, United Kingdom aimed at acquiring a quarter of Unilever Nigeria’s shares to increase the multinational’s majority equity stake in the Nigerian subsidiary to 75 per cent.

The latest audit of Unilever Nigeria, scheduled to be presented to the company’s general meeting on May 12, indicated that Unilever UK’s total shareholdings in Unilever Nigeria only increased by 8.49 per cent from 50.04 per cent to 58.53 per cent after the conclusion of acquisition bid.

Besides, Unilever UK had resorted to mopping up the shares of Unilever Nigeria through the Nigerian Stock Exchange (NSE).

Unilever UK now holds 58.53 per cent, 16.47 per cent short of the 75 per cent, through two holding companies-Unilever Overseas Holdings BV Holland, which holds 50.04 per cent and Unilever Overseas Holdings BV, which holds 8.49 per cent.

Nigerian investors retain 41.47 per cent shareholdings in Unilever Nigeria.

“The total shareholding of Unilever Overseas Holdings B.V. increased to 321,395,410 following the Tender Offer to other Shareholders of Unilever Nigeria Plc and open market purchases made during closed periods in 2015,” according to the audit.

Checks indicated that Unilever UK holds a total of 2.214 billion ordinary shares of 50 kobo each out of Unilever Nigeria’s total issued shares of 3.78 billion ordinary shares of 50 kobo each. A breakdown showed that Unilever Overseas Holdings BV Holland holds 1.89 billion shares.

Under the extant laws, a 75 per cent equity stake would have given Unilever UK the overriding majority equity stake to undertake several strategic transactions including mergers, acquisitions, new capital issues and other major corporate changes with little or less resistance from Nigerian shareholders.

A shareholder said they mobilised against the acquisition bid because Nigerian shareholders felt the bid was not fair and in the best interest of Nigeria.

The shareholders’ leader cited shareholders’ resistance to similar move by GlaxoSmithKline UK, which was forced to abandon bid to acquire overriding majority equity stakes in GlaxoSmithKline Consumer Nigeria by acquiring shares held by minority Nigerian shareholders.

Unilever Overseas Holdings, the United kingdom-based foreign core investor in Unilever Nigeria, had in first half of 2015 sought to increase its majority equity stake in the Nigerian subsidiary from 50 per cent to 75 per cent, citing long-term strategic importance of Unilever Nigeria to its global business.

In a transaction initially valued at about N43 billion or £144.5 million, Unilever Overseas Holdings sought to increase its equity stake in the Nigerian company from 50.04 per cent up to a maximum of 75 per cent by buying additional shares from minority shareholders. The tender offer sought to acquire about 942.42 million ordinary shares in Unilever Nigeria at a price of N45.50 per share in cash.

In a statement signed by Richard Hazell, Director, Unilever Overseas Holdings B.V, Unilever had said it was making the additional share acquisition as part of long-term strategic plan by the conglomerate as it believes that Nigeria offers significant growth potential.

“The Unilever Group has had a major presence in Nigeria for many years and continues to believe that the country offers significant growth potential. This makes Nigeria a strategic long term investment priority for Unilever Overseas.

Globally, the Unilever Group is focused on investing in the foods, household and personal care categories and the long heritage and great brands of Unilever Nigeria in these categories in Nigeria make it attractive for Unilever Overseas to increase its holding in Unilever Nigeria, whilst maintaining its stock exchange listing,” Unilever stated in the statement enclosed in the tender offer.