Rebel investors

Unilever faces dissent over plans to restructure

UNILEVER has faced a setback in its bid to convince investors it should ditch its Anglo-dutch structure after Legal & General Investment Management said it would oppose the move.

Unilever’s sixth-largest shareholder, with a 2.28pc stake, said the company had not made a “compelling case” for scrapping the dual listing in favour of a single headquarters in Rotterdam.

Despite a charm offensive by the Unilever board, LGIM has opted to join the chorus of dissenting voices, which includes M&G Investments, Columbia Threadneedle and Aviva Investors.

Sacha Sadan, LGIM’S director of corporate governance, said it had been a supportive shareholder of Unilever but would vote against the proposals during the extraordinary general meeting on Oct 26.

“We asked the company to ensure that any approach they take safeguards the ability of our clients to maintain their investment and benefit from Unilever’s continued success,” he said.

“We do not believe Unilever has made a compelling case for many plc shareholders to support the recommendation in favour of Dutch incorporation. Therefore, we intend to vote against Unilever’s proposed resolution.”

Such has been shareholder anger over the plans that key board members could face investor revolts at next year’s general meeting, according to Sky News. A number of institutional investors are reportedly drawing up plans to oppose the re-election of Unilever chairman Marijn Dekkers and senior independent director Professor Youngme Moon.

The Investor Forum, an organisation which represents institutions, said its members had “escalated concerns” about Unilever and it had talked to the company on their behalf.

Unilever, which owns dozens of store-cupboard staples from Marmite to Persil, issued a staunch defence of its proposals earlier this week. Writing in The Telegraph, Mr Dekkers brushed aside the suggestion that investors would face a new tax imposed by the Dutch government and insisted it would improve the way Unilever is run and make it easier for the company to buy and sell brands.

While it has committed to keeping its British operations running, the 90-year-old company has faced criticism for the decision, which will lead to it being booted out of the blue-chip FTSE 100 index.

‘We do not believe Unilever has made a compelling case … in favour of Dutch incorporation’

UK shareholders, who will be forced to sell their stakes, have lobbied FTSE Russell, which polices the London Stock Exchange’s indices, to keep Unilever in the FTSE 100. The shares will still be available to buy through a secondary listing on the London market.

Two of Unilever’s three divisions, accounting for 60pc of its turnover, will continue to be based in London and the company plans to maintain its UK headcount of 7,000.

Mr Dekkers said the company could bolster its M&A activity after selling its spreads division for £6bn last year in a deal he said was complicated by the dual structure.

Aviva Investors said last week that there was “only downside” to Unilever’s plans. The company needs support from at least 75pc of its shareholders for the relocation to go ahead.