Unilever faces more shareholder opposition to Netherlands move
Legal & General Investment Management has indicated it will vote against the move.
Unilever is facing growing opposition to its move to a Netherlands-based unified structure, after another shareholder signalled its intention to vote against the change.
Legal & General Investment Management (LGIM) has joined other investors in saying it will not back the scrapping of Unilever’s UK-Dutch dual listing and the relocation of its headquarters to Rotterdam.
Sacha Sadan, director of corporate governance at LGIM, said Unilever had not made a “compelling” case for the move.
“We understand Unilever has explored a number of alternatives in reaching its final decision,” he said.
We asked the company to ensure that any approach they take safeguards the ability of our clients to maintain their investment and benefit from Unilever’s continued success. Sacha Sadan
“However, we do not believe Unilever has made a compelling case for many PLC shareholders to support the recommendation in favour of Dutch incorporation. Therefore, we intend to vote against Unilever’s proposed resolution.”
The opposition from LGIM, which holds a 2.28% stake in Unilever, comes after similar warnings from other investors.
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Aviva Investors, Lindsell Train, Columbia Threadneedle and M&G Investments have all indicated that they will vote against the move to the Netherlands in a ballot scheduled for October 25 and 26.
Mr Sadan also said that LGIM had reached its decision even after engaging with the company on its move to change its structure.
“We asked the company to ensure that any approach they take safeguards the ability of our clients to maintain their investment and benefit from Unilever’s continued success. As part of our engagement with Unilever we have also worked with the Investor Forum to engage collectively with other investors.”
Unilever announced that it planned to “simplify” from two legal entities into a single one, incorporated in Rotterdam, in March.
It dealt a major blow to the UK Government and its efforts to uphold Britain’s status as a centre for business after Brexit.
But Unilever has insisted the move to Rotterdam has “nothing to do with Brexit”.
It also said at the time its 7,300 workers in the UK and 3,100 in the Netherlands will be unaffected by the changes.
Unilever, which is also behind well-known household brands such as Ben & Jerry’s ice cream and Lipton teas, employs around 169,000 people around the world.
The changes simplification will be achieved through a UK scheme of arrangement and a Dutch legal merger, which will complete over the weekend of December 22 and 23.
The new shares will begin trading in the Netherlands on December 24.
However, Unilever’s shares are unlikely to continue trading in the FTSE 100 in the wake of the move.
Without a UK headquarters, Unilever is expected to fall short of requirements which would allow a listing on the FTSE 100, where its shares currently trade.
The shares would continue to trade on the London Stock Exchange, but would no longer be listed on a benchmark index.