Fis Buy Out Hind Lever Shares With Brooke Bond

The Unit Trust of India and other financial institutions have picked up the 2.56 lakh Hindustan Lever Ltd (HLL) shares that Brooke Bond Lipton India Ltd (BBLIL) has sold as a precursor to the merger between the two companies.

When asked about the sale proceeds involved in the deal, an HLL spokesperson said that it was concluded at the prevailing market price. With the price ranging around Rs 800 per HLL share, the deal amount ranges between Rs 25 crore to Rs 30 crore.

This deal was concluded as a precursor to the mega-merger between HLL and BBLIL as dictated by the Calcutta High Court.

According to BBLIL, large investors including UTI and other FIs have picked up the shares well before the stipulated December 31 deadline. Unilever's wholly-owned Indian subsidiary has not picked up any HLL share, said an HLL source, adding that any such move would necessitate a clearance from the Foreign Investment Promotion Board.

The amalgamation of the companies was approved by the Calcutta High Court on December 9.

The court had overruled all objections regarding the mega-merger and asked BBLIL to dispose of its entire share holding in Hindustan Lever by December 31.

The present Companies Act prohibits firms from holding its own shares and the merger between the two companies being okayed, Brooke Bond was asked to dispose off its 2,36,000 shares of Hindustan Lever.

The objections to the merger, which was announced in April this year, mainly related to the share swap ratio of 9:20, wherein holders of 20 shares of Brooke Bond would be entitled to 9 Hindustan Lever shares. The swap ratio was worked out by S B Billimoria.

This merger is expected to transform HLL into a consumer goods juggernaut with interests spanning soaps and toiletries, chemicals and foods.