Unilever’s bid to quit Britain ‘on the rocks’ Unions back shareholders’ campaign to block move
TRADE unions have attacked the move by Unilever to axe its UK headquarters as speculation grows that the embattled firm’s plan will crumble. Unite and the GMB urged investors to oppose plans by the consumer goods giant to base itself solely in the Netherlands.
A string of major shareholders have already said they will vote against the move at a meeting later this month. City analysts increasingly think the business will lose the ballot and have to back down. Laith Khalaf, of savings firm Hargreaves Lansdown, said: ‘It’s now entirely plausible that Unilever might fail to push through the move to Rotterdam.’
Unilever claim the change is aimed at making the company simpler but critics say it is designed to block takeover attempts by hiding behind more protectionist Dutch laws. The company’s bosses were badly scarred after fighting off a bid by US rival Kraft Heinz last year.
Unilever has 7,500 employees in Britain and although no jobs will be affected by the change, it is feared the company will be less focused on protecting its UK workforce in future if it does not have its headquarters here.
Rhys McCarthy, Unite’s national officer, said: ‘Investors understand the need for great British-based companies like Unilever to retain their headquarters in the UK.
‘The UK’s weak takeover rules, which put short-termism ahead of the long term, are clearly a major factor in Unilever’s proposed move following a hostile takeover bid.’
Eamon O’Hearn, GMB national officer, said: ‘We welcome UK investors’ increasing opposition to the Unilever proposals.’
The firm’s plan has triggered a rare public outcry in the City, unitsell ing major firms against it, including Legal & General Investment Management, Aviva Investors, M&G Investments and Columbia Threadneedle. It is feared the move will expose them to higher Dutch taxes, despite a vow by Unilever this will not happen.
Many investors will be forced to their stakes at any price if the move goes ahead because Unilever will be kicked out of the FTSE 100 index of major British companies. Many funds are only allowed to hold shares in Footsie companies.
Investment bank Jefferies has warned this could trigger a £1.2billion fire sale of shares in the runup to Christmas, potentially with a large impact on the stock price.
Unilever must win support for the move from investors who own 75 per cent of shares listed on the London Stock Exchange – and those who control more than 10 per cent have already said they are opposed.
Groups that support small investors are also furious at the complex rules governing the vote, because they fear ordinary savers are being denied a fair say.
‘Increasing opposition’