UNILEVER has extended its offer to shareholders in Lyons Irish Holdings (LIH), but has not increased it beyond the original 323.3p, despite a very poor response. However, it remains open to Unilever to increase the offer at a later stage.
Just one quarter of a per cent of acceptances were received by Unilever to the offer to buy the remaining shares in the tea company. The remaining 24.74 per cent rejected it. Of the 7.5 million shares Unilever wants to acquire to get 100 per cent control (it currently has 75 per cent) of Lyons, only 78,963 share acceptances were received.
The Lyons board, which had asked shareholders not to accept the offer, said last night it was surprised at Unilever's decision to only extend the offer.
"This result represents a resounding rejection of the offer by the shareholders of LIH. In view of this, the board is surprised at the response of Unilever Ireland, which appears to take no account of the shareholders reaction, the Lyons board said in a statement.
Unilever maintained that the offer for the balance of the Lyons' shares was fair and reasonable and yesterday posted a circular to shareholders in the company.
In the document, Unilever says the circular to shareholders issued by the Lyons' board last month, urging them to reject the offer, suggested that, since 1990, acquisitions of minority shareholders in firms with Irish Stock Exchange listing have generally secured a substantial premium over the last dealt share price before the relevant offer period.
Unilever argues that the circumstances in those transactions were different.
"In particular, dealings in LIH's shares in the months prior to the commencement of the offer were made in the public knowledge of Allied Domecq's interest in selling its 75 per cent share (in Lyons) and the related media speculation as to the value of any offer for Allied Domecq's shareholding and for the minority shareholdings."
The Unilever board says the last dealt share price of LIH shares prior to the offer period of 330p reflected the market's assessment of the value of any such offer. "Although the offer is lower than this last dealt price of LIH shares of 330p, it is important to realise that you have received an interim dividend of 7.8p per share since the commencement of the offer period and hence a comparison with the earlier price should take this dividend into account, the circular to Lyons shareholders maintains.
However, sources close to Lyons said last night that, although there may be some argument to be made regarding the dividend benefit, the Lyons shares last dealt at 340p. The board will meet today to consider its position and may issue a detailed response to Unilever next week.
