Unilever hit by buyback revolt

THREE major Unilever shareholders will vote against proposals to buy back €155m (£133m) of preference shares in a move that could scupper the move.

Anglo-Dutch consumer giant Unilever has proposed to cancel the four per cent Unilever cumulative preference shares and to seek authorisation to buy back its six per cent and seven per cent cumulative preference shares at its annual shareholders meeting to simplify its capital structure.

Unilever said yesterday the three major holders of the preference shares have told the group they would vote against the proposals and would not tender their preference shares.

Unilever has issued various classes of preference shares in recent years but since then there has been a gap between their economic value and the votes that they represent, the company admitted in March.

It said yesterday that despite the opposition to the proposals, Unilever would proceed with the intended buyback, to be hammered out at its annual meeting.

“Given the anticipated wide support of other shareholders, Unilever is optimistic that the proposals will be approved by the general meeting of shareholders,” the company said.

The cancellation of the four percent Unilever preference shares will cost the group around €35m.

If all holders of the six per cent and seven per cent Unilever preference shares tender their shares, this would cost a maximum of €120m, Unilever said.