Unilever hits back over City fury at Dutch move
Unilever has stepped up its charm offensive on City investors as it tries to combat a brewing shareholder revolt over plans to ditch its London headquarters.
The consumer goods giant has organised meetings with the most vocal opponents of the plans in an attempt to assuage their fears, although its attempts to change minds have so far fallen on deaf ears, Morning Wire understands.
Unilever’s top management came out fighting today amid mounting pressure from London-based investors who fear being forced to sell their shares as the firm drops out of the FTSE 100.
Graeme Pitkethly, Unilever’s chief financial officer, said: “It’s got great benefits for all shareholders” who will benefit from “a stronger and a simpler Unilever”.
Read more: M&G Investments adds to pressure on Unilever to back down on going Dutch
The firm, which makes household-name brands such as Marmite and PG Tips, plans to abandon its UK public limited company (Plc) in favour of a single Dutch company listed primarily in Rotterdam.
Big investors in the Square Mile who hold significant numbers of shares in Unilever, including M&G Investments, Brewin Dolphin, Lindsell Train and Columbia Threadneedle, have all objected to the move, which needs the consent of 75 per cent of the votes attached to London-listed shares in a crunch vote scheduled for 26 October.
It also requires the support of half of the Dutch shares, and a majority of individual shareholders.
While shares will still be listed in sterling on the London Stock Exchange, its absence from the UK’s blue-chip index means some investors will be forced to sell to satisfy their investment mandates.
Read more: Unilever facing growing shareholder revolt over plans to abandon London PLC
Unilever execs have privately expressed confidence they will win approval in spite of the City opposition.
Marijn Dekkers, Unilever’s chairman, tonight urged small British shareholders to back the firm, saying that indexation concerns only apply to bigger investors.
“Maybe they’ve seen the headlines with some UK shareholders being hurt by the plans, but that doesn’t mean that applies to them,” he told the Financial Times.
Some investors also fear that dividend payments by the Dutch firm could be liable for withholding taxes which will reduce returns for investors outside the Netherlands.
However, Pitkethly told BBC radio earlier in the day that “there will be no additional taxes for ex-Plc shareholders”, adding that public criticisms by Aviva Investors boss David Cumming were “incorrect”.
Unilever’s move was in part prompted by a desire to ward off approaches such as the one it received from US giant Kraft Heinz last year.