Unilever drops plan to leave London headquarters
Shareholders’ rebellion forces firm to abandon switch to a single holding company in Holland
UNILEVER has withdrawn plans to move its headquarters from London to Holland after a massive shareholder rebellion.
The consumer goods company said the proposal had not “received support from a significant group of shareholders”.
Unilever, which makes Dove soap and Wall’s ice cream, planned to shift to one Dutch holding company with shares listed in Amsterdam, London and New York. Its headquarters would have moved from London to Rotterdam. It would have retained two thirds of its divisions in the UK, where it employs 7,000 people.
However, the company was forced into a U-turn after shareholders attacked the move. They said it would leave many Uk-based investors and funds that track the FTSE 100 with no choice but to sell their shares.
The change of tack could have ramifications for Mark Rutte, the Dutch prime minister and former Unilever worker, who had planned to ditch a 15pc tax on dividends to help clear the way for the company. Mr Rutte indicated yesterday his government may keep the tax after all, having faced stiff opposition from rival parties.
Marijn Dekkers, the Unilever chairman who had championed the move alongside Paul Polman, the chief executive, said: “The board continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever.”
He said the board would now consider its “next steps” and press ahead with its plan to cancel the NV preference shares. Shares in Unilever rose 1pc at £41.16 in early-morning trade before sinking 0.7pc.
The climbdown comes just over a week after Mr Dekkers made an impassioned appeal to shareholders to back the plan, developed earlier this year. Writing in The Telegraph, Mr Dekkers said: “Simplifying our business is all about allowing our operating divisions to compete and perform even better for the future.”
Unilever’s rationale was that it would streamline its corporate governance and make it easier to do deals, with Mr Dekkers arguing it was restricted in making acquisitions “because of the complexities of having two sets of shares”.
Experts also believe Unilever was seeking better protection from a takeover bid, as the Dutch have stricter rules on foreign companies swooping on their businesses.
But in the last fortnight a string of investors including Royal London Asset Management, Schroders, Legal & General, M&G Investments, Columbia Threadneedle and Aviva Investors have spoken out against the move. Together they hold around a 10pc stake in the company.
Earlier this week powerful shareholder group Pensions and Investment Research Consultants (Pirc) recommended that UK investors oppose the plan, arguing that it could be viewed that “[UK] shareholders are being asked to consent to a takeover without a premium being paid.”
Greg Clark, the Business Secretary, welcomed the decision. He said: “Keeping Unilever’s HQ in the UK builds on two of its three global businesses being based here.”
Unilever’s unusual dual corporate structure dates back to 1929, when it was formed in a merger of Britain’s Lever Brothers and the Dutch company Margarine Unie.