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Unilever break-up [ULVR] ?

Practical discussions about equity High-Yield Portfolios (HYP) for income
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monabri
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Unilever break-up [ULVR] ?

#34615

Postby monabri » February 26th, 2017, 2:07 pm


PinkDalek
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Re: Unilever break-up [ULVR] ?

#34640

Postby PinkDalek » February 26th, 2017, 5:28 pm

The article includes "However, the tax consquences are likely to prevent such a move. Currently, UK investors receive tax credits on UK-sourced dividends ...".

Ignoring the misspelling, nonsense.

ADrunkenMarcus
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Re: Unilever break-up [ULVR] ?

#34644

Postby ADrunkenMarcus » February 26th, 2017, 5:49 pm

Unilever is doing pretty well as it is. There's always room for improvement, but knee-jerk reactions would be an unwelcome crang-fest. If they did spin off the food business then I think I would sell any shares I received and reinvest the proceeds back into my remaining Unilever holding.

Best wishes

Mark.

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Re: Unilever break-up [ULVR] ?

#34652

Postby JMN2 » February 26th, 2017, 6:15 pm

This is not good news, these spin-offs seldom work, wasn't there one with "32" in the name recently? It's like that and Pearson all over again, rocking the boat, fixing what is not broken. Fees to be earned I guess, a solid steady uneventful and boring paragon of an asset is a slow earner.

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Re: Unilever break-up [ULVR] ?

#34654

Postby ADrunkenMarcus » February 26th, 2017, 6:18 pm

I imagine certain changes would go down badly in the Netherlands, especially in today's political climate and with the Dutch PM struggling to catch Wilders in the opinion polls.

Best wishes


Mark.

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Re: Unilever break-up [ULVR] ?

#34662

Postby flint » February 26th, 2017, 7:06 pm

JMN2 said: This is not good news, these spin-offs seldom work, wasn't there one with "32" in the name recently?
The last 2 spin-offs I received were South32 from BLT and Indivior from RB.
they have both worked for me.

Monabri - I think the tax issue raided in the DT article refers to the " simplification " issues rather than the product split.
As suggested by AdrunkenMarcus I would prefer not to own Dutch shares that might be subject to taxes that I do not pay at present.
I have held ULVR, RB. and RDSB for may years. 3 great Anglo Dutch companies. I would be happy for them to toddle along as at present.

tjh290633
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Re: Unilever break-up [ULVR] ?

#34709

Postby tjh290633 » February 26th, 2017, 10:34 pm

flint wrote:JMN2 said: This is not good news, these spin-offs seldom work, wasn't there one with "32" in the name recently?
The last 2 spin-offs I received were South32 from BLT and Indivior from RB.
they have both worked for me.

Funny that you should say that. I decided that I would add to the originally miniscule holdings, to make them nearer something which I felt might be tradeable. INDV paid two dividends then decided to stop. The share price rose, fell then rose again. Had it kept on paying dividends it might have turned into a decent HYP share. As it is, a single share held from the demerger at 23 Dec 2014 to now would have given an IRR over the two years of about 85%. Not an unsatisfactory outcome, but disappointing on the dividend front.

S32 worked the other way round. On demerging in May 2015 the price fell, and it didn't pay an interim, then it announced a final and the price began to rise, and the interim was 3.6 times the previous final, which boded well. It may well turn out to be a good HYP share. The IRR over the almost two years has been about 16%.

An earlier split was that of Six Continents, formerly Bass, which in April 2003 split into Intercontinental Hotels Group (IHG) and Mitchells and Butlers (MAB). Equal number of shares in each, but IHG valued higher than MAB, at 371p compared with 222p. Then MAB returned a chunk of capital, 68p per share, and consolidated about 2 for 3. MAB paid dividends starting at 8.5p, while IHG paid 13.5p, comparable yields. IHG now began returning capital and consolidating, in December 2004 and June 2005 and threatened more. The yield fell below 2% and I decided that it was time to part company with IHG, which I did in August 2005 at 746p, twice the price at the split. MAB carried on paying increasing dividends until in 2006 the yield had also fallen below 2% and I sold at 596p, almost 3 times the original price. It later blotted its copybook by stopping dividends, so selling turned out to have been a good decision.

What might happen with Unilever? One scenario is to split into foods and household products. One article today suggests that these might be a value share and a growth share respectively. Which will have the higher value? Which will have the higher yield? Will the best plan be to bring both up to median weight? Might it be better to dump one and put the proceeds into the other? If so which one? Might the answer be to sell INDV and reinvest in the two new parts of ULVR, which would leave the number of holdings as now.

All conjecture, of course, but might one or other succumb to a take-over bid? The imagination could run riot, but until we see the whites of its eyes it is best not to pull the trigger.

TJH
Last edited by tjh290633 on February 26th, 2017, 10:49 pm, edited 1 time in total.
Reason: Unfinished

Arborbridge
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Re: Unilever break-up [ULVR] ?

#34741

Postby Arborbridge » February 27th, 2017, 7:16 am

On the Today program this morning, a correspondent in the studio suggested that this would not be a dramatic split - more a spinning off of less profitable brands. Mentioned was made of PG Tips and - ironically - Marmite.

Speculation won't get us far: there's nothing to be done from our point of view, but wait.


Arb.

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Re: Unilever break-up [ULVR] ?

#34771

Postby idpickering » February 27th, 2017, 9:20 am

Arborbridge wrote:On the Today program this morning, a correspondent in the studio suggested that this would not be a dramatic split - more a spinning off of less profitable brands. Mentioned was made of PG Tips and - ironically - Marmite.

Speculation won't get us far: there's nothing to be done from our point of view, but wait.


Arb.


Absolutely right Arb. Have a virtual rec. :) Wise words indeed. What will be will be.

Ian.

monabri
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Re: Unilever break-up [ULVR] ?

#34791

Postby monabri » February 27th, 2017, 10:26 am

IF it does get split, I'm buying into the bit that DOESN'T make Marmite :lol:

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Re: Unilever break-up [ULVR] ?

#35871

Postby JMN2 » March 3rd, 2017, 8:37 am

Split or not, I sold down to median size and bought NG. and SSE, a yield pick-up, Unilever had become a very large position but was earning the least dividends. Everything looks a bit more balanced now.

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Re: Unilever break-up [ULVR] ?

#35904

Postby Arborbridge » March 3rd, 2017, 10:22 am

JMN2 wrote: Everything looks a bit more balanced now.


Sounds a sensible action.

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Re: Unilever break-up [ULVR] ?

#36463

Postby ADrunkenMarcus » March 5th, 2017, 5:45 pm

I have a big chunk allocated to Unilever. I make no pretence of being diversified.

Unilever started my portfolio measuring year (the end of April 2016) comprising about 8% of my dividend growth portfolio's capital. At present, it still stands at 7.5% of the total but I have not trimmed it back and hold precisely the same number of shares. During that period, Unilever's share price has risen over 26% and, of course, there have been dividends on top. However, the income unit price has risen about 35% in the same timeframe so Unilever has been a relative laggard for a change.

Best wishes


Mark.


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