Consumer goods giant Unilever is facing shareholder revolt over plans to move its headquarters from London to the Netherlands, with more City investors saying they will vote against the decision.
Brewin Dolphin today became the latest investment manager in the Square Mile to object to the move, which will see the FTSE 100 stalwart leave the UK’s benchmark index.
Nicla Di Palma, an equity analyst at Brewin Dolphin, said: “We aren’t convinced that the move will realise tangible benefits for shareholders and plan to vote against.”
Aviva Investors, Lindsell Train and Columbia Threadneedle have also raised concerns, arguing that the decision could negatively impact British investors. Another top 20 investor told City A.M. it will likely vote against the change.
Unilever, the maker of Dove soap and Marmite spread, plans to simplify its current dual-headed structure into a single holding Dutch company, with a secondary listing on the London Stock Exchange. However, the plan would mean that the stock falls out of the FTSE 100, potentially forcing some holders to sell their shares.
Lindsell Train said the move will impact those clients who “insist on strict adherence to benchmark holdings”, potentially leading to a situation in which they “become forced sellers of Unilever shares at a time and price not of our choosing.”
A Unilever spokesperson said: “We have had over 200 engagements with our investors over the past few months. The vast majority of our investors are supportive of the proposal to simplify the company structure.”
The plan must be passed by 75 per cent of UK shareholders, but is facing a growing outcry from London-based investors in particular.
Iain Richards, head of responsible investment at Columbia Threadneedle Investments, said: “We continue to agree that restructuring Unilever makes sense, but are still of the view that Unilever’s approach discriminates against UK shareholders.”
The move to the Netherlands could also impact British investors in future because of a Dutch withholding tax which could be imposed on dividends, on top of taxes liable in the UK. Lindsell Train pointed out that Unilever was not offering a perpetual guarantee that shareholders in the London PLC will not be worse off.
Aviva’s chief investment officer David Cumming said there was “no upside” to the change, speaking to the BBC today.
“Aside from the fact it is disappointing to see a world-class company like Unilever leave the UK, it also means longstanding UK shareholders may be forced to sell their stock,” he said.
“I don’t see logically why any UK shareholder would support their decision to go Dutch, because there is no upside only downside.”