Unilever butters up investors by selling margarines unit

Dutch-British consumer products giant Unilever on Thursday announced the surprise sale of its underperforming margarine division, seeking to soothe investor jitters after spurning a takeover bid by US rival Kraft Heinz.

The Rotterdam-based group said it is also planning to boost dividends in 2017 by 12 percent, and will launch a shares buy-back of some five billion euros ($5.3 billion) by the end of the year.

"After a long history in Unilever, we have decided that the future of the spreads business now lies outside the group," chief executive Paul Polman said in a statement.

The move came amid a company review launched in the wake of an out-of-the-blue takeover bid in February by US food and beverage giant Kraft Heinz.

One poll showed that only half of the company's shareholders had agreed with Polman's flat-out refusal to even consider Kraft's offer.

With the moves announced on Thursday, Unilever "wants to make sure shareholders are not tempted by another bid and is throwing cash at the problem," Wilson added, warning it "smacks a little of short-termism."

Unilever's margarines and spreads include such household names as Flora, and Stork along with Blue Band and Rama.

It was set up as a separate unit in 2015 but "remains challenged in developed markets and we have now taken the decision to launch a process to either sell or de-merge spreads," the company said in its statement.