Kill off Unilever’s plan

When UK soap manufacturer Lever Brothers merged with Dutch firm Margarine Unie to create Unilever in 1929, both companies kept their domestic stock listings.

since then Unilever has run a dual listing with two holding companies – plc in London and nV in the netherlands.

on any measure, the Anglo-Dutch combo has been a great success.

The business has grown like Topsy, gobbling up well-known brands around the world from Marmite to Dove to Ben & Jerry’s ice cream. It’s now worth a mega £115bn.

Then last year America’s Kraft heinz tried to snaffle the giant, sending Unilever’s top team into a tail spin.

Kraft failed in its attempt but the move so terrified the Unilever board it decided to review its corporate structure.

This led to its controversial decision to switch its domicile and primary listing to Rotterdam – a move which provoked outrage here because of the blow to upholding Britain’s status as a centre for business after Brexit and loss of the city’s FTse 100 reputation.

But also because of a sneaky promise from the Dutch government to scrap withholding taxes on dividends. That promise – yet to be delivered – may have spun the board, sealing its plan, confirmed yesterday, to killoff life as a UK plc stock, drop out of the FTse 100 and go Dutch.

This would be a disaster. Unilever shares are a staple ingredient in most active and passive pension funds as one of the stars of the FTse 100, the All-share index and the FTse 350. It’s also a big hit with small shareholders because of its solid dividend income.

Investors have six weeks to go through the small print of the prospectus to decide whether to give Unilever their blessing at october’s extraordinary meetings.

They should not. There are many reasons why they should block the vote, which needs a 75pc majority for the UK plc.

The signs are good. Many investors are unhappy about the move, arguing the switch will discriminate against UK shareholders. Investors such as columbia Threadneedle and Lindsell Train say they want London to stay the primary listing.

others say so privately. They don’t buy Unilever’s claims it had no choice but to move because of liquidity or because there are more Dutch investors than British.

The facts are these. Tracker funds with $ 200bn follow Unilever through the FTse 100, All share and 350 indices. Yet only $84bn follow its Dutch stock on the euronext 50. There’s no contest. Many active investors will simply stop buying its shares if they are not in the FTse 100.

Fund managers are also sceptical about claims that over half the stock is owned by Dutch investors. They point to figures which show that fewer than 30pc of trading volume is through Amsterdam, that 40pc is overthe-counter trading, and another chunk on pan-european multilateral trading facility (MTF) platforms such as Turquoise – owned by the London stock exchange.

They also query Unilever’s assertion that Us investors prefer holding Dutch eurodenominated shares to sterling shares. This is nonsensical since nearly a third of the FTse 100 is owned by Us investors.

Investors still have a chance to kill this terrible plan.

Britain on the up

TheRe is more bright news on the economy after July’s 0.6pc growth figures on Monday. The number of unemployed has fallen again while the number of youngsters without work is at its lowest level since records began in 1992.

Wages are back on track, growing faster than inflation at 2.9pc, the highest in three years. With inflation at 2.5pc for July, real wage growth was up by 0.5pc.

At long last competition for workers is starting to work through into wages.

Top Mark

MARK carney, the governor of the Bank of england, was much criticised for his overthe-top role in pushing Remain during the Project Fear campaign.

But post-Brexit he has been one of the UK’s most vigorous champions in eU negotiations, arguing that the city is too big and too important to be ruled by email from Brussels.

so it’s to be welcomed that carney is staying on until 2020 to see through Brexit.

The unreliable boyfriend has become rather reliable, if not besotted.