Unilever gets backing from City investors after FTSE 100 company unveils shake-up including sale of spreads business

City investors gave their backing to Unilever today after the FTSE 100 company unveiled a shake-up prompted by Kraft Heinz’s failed takeover bid.

The firm announced it would be kicking off a €5bn (£4.3bn) share buyback, raise its dividend by 12 per cent, review its dual-listing structure and sell its £6bn-valued spreads business.

Asset managers spoken to by City A.M. broadly welcomed Unilever’s plans.

Read more: Here’s how analysts reacted to Unilever’s proposed spread sale

Mike Fox of Royal London Asset Management, which owns a 0.7 per cent stake in Unilever, described the approach as a “proportionate response to the bid for Kraft Heinz, without radically changing the direction of travel”.

“We welcome Unilever’s commitment to its sustainable business model, where decisions are taken in the long-term interests of the company and its shareholders,” he said.

“This approach, one which has been central to management thinking at the firm, has delivered attractive investment returns for many years.”

Blake Hutchins, who handles a 0.7 per cent stake for Investec, told City A.M. he welcomed the “encouraging developments, particularly since this appears to be a focusing of existing strategy rather than a complete revision”.

Read more: Unilever shake-up: Spreads brands to be sold and €5bn share buyback starts

He added: “Whilst the cost initiatives are important, the priority must remain on sustainable volume driven revenue growth, which reassuringly the company has emphasised today.”

Freddie Lait, chief investment officer of Latitude Investment Management, which owns a small stake in Unilever, was confident the announcements would “drive increased shareholder returns from here until 2020 and beyond”.

He said: “As one of our top ten holdings, Unilever is a clear bastion of long-term value creation and we are incredibly pleased that the business has remained independent.”