Unilever has launched a €450m (£407m) deal to buy back preference shares, a move it believes will improve its capital structure and corporate governance.
The vast majority of the preference shares are held by two investors, NN Investment Partners and ASR Nederland, and a public offer will be initiated so that any remaining preference shareholders can sell back to Unilever under the same terms. The shares were issued between 1927 and 1964.
The move follows Unilever’s rebuffal of a bid for the business by Kraft Heinz, which raised questions about the level of shareholder value it would subsequently deliver, and its multi-layered stocks.
“This represents an important step in simplifying the capital structure, which Unilever has been pursuing for many years,” the company said in a statement to the markets. “It will make Unilever easier to understand, and improve corporate governance by strengthening the link between economic interest and voting rights for our shareholders.”
Unilever currently operates with two corporate structures, each listed on the UK and Netherland stock exchanges. The same directors and non-executives sit on each board.
The share offer memorandum will be published as soon as it is agreed by the Dutch Authority for the Financial Markets, expected within 12 weeks, and then launched in Q3 2017. Settlement will then take place at the end of the year.
Kraft Heinz made a $143bn (£110bn) approach for Unilever in February, a move fought off quickly by Unilever’s board. The offer was withdrawn within 48 hours.