Firm with £1bn of Unilever shares joins fight to save its HQ

UNILEVER’S plot to scrap its UK headquarters has suffered a fresh setback after another major investor came out against it.

Legal & General Investment Management is the latest shareholder to warn it will oppose the plan in a vote due next month.

Meanwhile, a group representing the City’s most powerful investors has also intervened in the row.

Consumer goods titan Unilever wants to axe its legal HQ in Britain and base the company solely in the Netherlands. British investors are furious at the plan because it is feared they could be exposed to higher taxes and the company will be removed from the blue chip FTSE 100 index.

LGIM, which is Unilever’s sixth-biggest shareholder in London, with a 2.3 per cent stake worth £1.2billion, is the latest in a string of City firms to speak out. In another sign of how concerned big shareholders are, it emerged that they have asked for an intervention from the Investor Forum – a powerful group which represents the City’s biggest names in spats with giant firms.

Other major shareholders to warn about the plans include Lindsell Train, Aviva Investors, Columbia Threadneedle and M&G Investments and NFU Mutual. Unilever must win support from investors who hold a combined 75 per cent stake through the London Stock Exchange if it is to ditch its British HQ. Separately, the company must get backing from a majority of shareholders who vote.

This gives huge power to ordinary savers who own share certificates, because their vote will count as much as huge pension funds. The proposal has riled investors because many are only allowed to hold stock in companies listed in the FTSE 100. If Unilever axes its UK headquarters it will be considered a Dutch business and kicked out of the Footsie – forcing these shareholders to dump their stock for whatever price they can get.

Unilever said: ‘We are aware a certain group of shareholders have expressed concern. We will continue to engage with shareholders.’

UNILEVER will make one of the biggest decisions in its corporate history in a few weeks – and small shareholders could play a key role.

The company, which owns dozens of brands, including PG Tips and Dove soap, traces its UK roots back to 1885. Now it is planning to ditch its London HQ and move to the Netherlands.

But Unilever’s shareholders must approve the move. The vote is in two parts. First, the company needs investors holding 75pc of shares by value to vote in favour. Second, more than 50pc of investors by number who vote must also give the thumbs up, regardless of the size of stake. This means that in the second part of the ballot, the many ordinary savers who own Unilever shares – even if it is just one – will have as much power as a large fund that holds thousands.

That’s the theory, at any rate. The only problem is, it may be expensive and difficult for these thousands of small investors to make their voices heard – particularly in the second element of the voting.

A hefty 36,000 individuals hold certificated shares – this is the old way of investing that means they have paperwork in their name. This makes their situation on voting straightforward.

But thousands more have bought shares through platforms such as Hargreaves Lansdown or Barclays Smart Investor. These shares are held in so-called nominee accounts.

For anyone who holds shares in this way, voting is more difficult and investors will need to take action to enfranchise themselves in order to exercise their full rights.

Gavin Oldham, chairman of investment platform The Share Centre, wrote to Business Secretary Greg Clark this week to express his disgust that private shareholders risk being silenced.

Hargreaves Lansdown has 20,000 clients who have invested in Unilever on its platform. Their shares are grouped together in one nomitheir nee account. So how do you make sure you can vote if you hold shares through a platform or adviser? It’s complicated.

Many platforms have a voting facility. It will either be emailed to you or displayed on a voting section of your online account. Barclays Smart Investor asks clients to phone if they want to vote.

For the first element, smallinvestor votes are added up and count towards the result. For the second part of the ballot, all shareholders on the platform are lumped together as one vote. The platform will vote in line with the majority of shareholders’ preference.

If you want to cast your own vote, you will need to have at least one ‘certificated’ share – one you hold directly and not on a platform.

YOU have two options. First, you can move one share off the platform. This typically costs £25. But it is not straightforward for savers who have bought Unilever shares through an ISA and is impossible if they are held in a SIPP pension plan.

Second you can buy a new share that is ‘certificated’ – one you own directly and not through the platform. Confusingly, you can do this through a broker such as Hargreaves Lansdown but you must be clear with them that this is what you want to do.

For a Unilever share the cost would be £82.61, including £42.40 for the share itself plus £40.21 dealing costs through Hargreaves Lansdown.

AJ Bell’s Charlie Musson encourages involvement, saying: ‘As a small investor it may feel like it won’t make any difference, but on high-profile issues such as the change of location proposed by Unilever, there is likely to be more engagement, so it could have an effect on the outcome.’