Paul Jarvis and Matthew Boyle London

Unilever has spent £715 million (R12.4 billion) to buy share rights left in family trusts by one of the founders of a predecessor company almost a century ago, simplifying its stock structure.

The purchase from trusts of William Hesketh Lever would boost earnings a share by 2 percent a year, the Anglo-Dutch company said yesterday. The amount paid was equivalent to £10.09 per Unilever ordinary share, 63 percent less than the closing price in London on Friday.

“It is good for all our shareholders,” Unilever chief financial officer Jean-Marc Huet said in a statement. “It is another step in the simplification of Unilever’s capital structure, making Unilever easier to understand, and eliminating ahead of time the burden of a significant dilution of shareholders’ interests.”

Hesketh Lever founded Lever Brothers, one of the companies that would later become Unilever, in the UK in 1885. When he died in 1925, he left rights to a large number of Unilever shares in various trusts.

These would have been converted at the end of 2038 into 70.9 million Unilever shares, or about 5.4 percent of the company’s share capital.

Unilever was created in 1930 when Lever Brothers merged with the Netherlands’s Margarine Unie. To avoid punitive taxes, two controlling companies were set up with identical boards and mutual sharing of brands and technology.

Unilever’s London-listed shares rose as much as 1.4 percent to £27.42 yesterday. The Amsterdam-listed stock advanced as much as 0.76 percent to e32.34 (R453.39).

The transaction would reduce the fully diluted share capital by 2.4 percent, the London- and Rotterdam-based company said. – Bloomberg