MAIL’S UNILEVER VICTORY
Giant axes bid to move HQ from UK after our campaign – now bosses face job fight
Unilever bosses were fighting for their jobs last night after they were forced to abandon controversial plans to quit the UK.
Facing a huge revolt from investors – and following a Mail campaign – the consumer goods giant dramatically scrapped a move to the netherlands.
The humiliating U-turn came as it dawned on the board that the backlash meant they could lose a crucial vote on the plan.
Chairman Marijn Dekkers and chief executive Paul Polman conceded in a 6.30am conference call that opposition was too strong. Mr Dekkers later admitted it was ‘appropriate to withdraw’.
Analysts last night called the episode ‘embarrassing’ and predicted the debacle could end in an ‘early retirement’ for Mr Polman.
The climbdown means one of europe’s most valuable companies – which owns brands including Marmite and Persil – will now stay in Britain ahead of Brexit.
The Mail has highlighted the impact Unilever’s plans would have had on British shareholders – including its removal from the FTSe 100 index that would have forced some investors to sell up.
A string of major City institutions have spoken out against the move in what one source described as ‘unprecedented’. Thousands of ordinary savers with shares in Unilever are also understood to have already voted against the plan.
A source close to Unilever said: ‘it was the momentum. The Mail was reporting it every day. There was a feeling that opposition was growing.’ Tim Bush, of Pensions and investment research Consultants, which had opposed the move, said: ‘it’s always common for a vote to be pulled when it’s going to lose.’
investors welcomed the change of heart at Unilever, whose links with Britain date back to victorian times with the creation of soap maker lever Brothers.
But the debacle has cast doubt over the future of Mr Dekkers and Mr Paul Polman as well as finance director Graeme Pitkethly.
Mr Polman, 62, was understood to be heading towards retirement but critics said he could be forced out sooner. veteran City commentator David Buik, of spread-betting firm Core Spreads, said: ‘Polman is on his way out. A new broom would be desirable. Unilever now needs a new chairman and chief executive.’
One major shareholder said: ‘i suspect there won’t be too many tears shed on either side if Mr Polman accelerated his departure.’
Another City source said: ‘ They didn’t listen to shareholders. no one was convinced that Holland was a better place for the company than the UK.’ And laith Khalaf, of savings and investment firm Hargreaves lansdown, said: ‘Questions will now legitimately be asked about the judgment of Unilever’s top brass.’
Unilever was created in 1929 with the merger of Dutch firm Unie with British soap maker lever Brothers, which dates back to 1885.
The company, whose brands include PG Tips, Dove, Domestos and Hellmann’s, now sells goods in 190 countries, employing 7,300 staff in the UK. it has joint legal headquarters in london and rotterdam – a structure it wanted to simplify by basing itself solely in the netherlands. The changes were proposed after an aborted £115billion bid by US giant Kraft Heinz last year.
But as a backlash from investors grew, at least ten big City institutions holding around 12 per cent of Unilever stock publicly opposed the move. This included Aviva investors, legal and General investment Management and M&G investments which look after the pensions, savings and investments of millions of workers. Stockbroker AJ Bell said almost a third of its 3,000 customers with Unilever shares had already voted to oppose the move.
russ Mould, investment director at AJ Bell, said: ‘The episode looks to have been badly mis-managed and the position of Paul Polman and the rest of the board is likely to come under severe scrutiny. Questions may be asked of the chairman and the chief executive.’
Analyst eddy Hargreaves, of banking group investec, said: ‘This is somewhat humiliating – at least humbling – for Polman and may accelerate his retirement.’
James Targett, an analyst at Berenberg, said: ‘it is rather embarrassing for management who had lobbied hard for simplification.’
last night there was jubilation at the news at Port Sunlight, the utopian workers’ village on the Wirral built by William Hesketh lever for his soap factory staff. despite being warned by email not to speak publicly, one worker said simply: ‘i’m happy it’s not moving. it means i still have a job.’
retired Unilever worker Jim Smith accused bosses of trying to move because of Brexit. ‘They said it wasn’t about Brexit, it was about having two headquarters, but they dressed that up,’ he added. ‘ it was mainly about Brexit. And now the shareholders have said, “no, we want to stay here”.’ resident richard lunn, 47, added: ‘The tradition and the heritage – why fix something that’s not broken and use eurosceptic reasons as an excuse?
‘A new broom would be desirable’ ‘Humiliating and humbling’
THE decision of consumer goods giant Unilever to abandon plans for the relocation of its corporate headquarters from London to Rotterdam is a spectacular victory on almost every conceivable level.
It’s a victory for shareholders, who rose in furious rebellion against the Unilever board’s ill-considered proposal and have now succeeded in thwarting it.
It’s a victory for the City of London, confirming once again its position as Europe’s undisputed financial hub.
And it’s a victory for the Daily Mail, which has highlighted the deep folly of this plan from day one, campaigned passionately to kill it off, and helped give an estimated 35,000 small investors in the firm a voice they would not otherwise have had.
For the Anglo-Dutch company’s chairman and senior directors however, this has been a costly and humiliating debacle – one which they should not be allowed to survive with their jobs intact.
The truth is that this scheme was obviously wrong-headed from the start.
Unilever – the makers of such domestic staples as Persil washing powder and Marmite – is a company with a great British heritage and still does most of its business in this country. As Lever Brothers, its name was synonymous with far-sighted and benevolent management and it remains a great powerhouse of the FTSE 100 share index.
As this paper has said all along, the idea of delisting in London and moving it to the financial backwater of Rotterdam was simply irrational.
Yes, there may have been superficial tax advantages in Holland and slightly greater protection against aggressive takeover bids. But it would also have made the firm’s shares far less attractive.
Britain has vastly greater inward investment than any other European country and infinitely more dynamic financial markets. For Unilever to turn its back on that would have been an act of insane self-harm.
It would also have forced large British investors including pension funds which track the FTSE 100 to sell their shares, disadvantaging countless ordinary savers.
So the dramatic U-turn, while crushing for the board, is a huge relief to everyone else.
Above all perhaps, this has been a great victory for the reputation of UK plc. With Brexit approaching, it provides a welcome reminder that Britain is still the country where the world wants to do business.