Unilever's Dutch move faces growing institutional shareholder opposition

3rd Oct 2018 08:29

(Sharecast News) - Columbia Threadneedle Investments has joined the ranks of Unilever shareholders stating its opposition to the company's proposal to move its headquarters to Rotterdam, ahead of a vote later this month.Unilever in March confirmed plans to change its dual-headed Anglo-Dutch structure and only maintain its headquarters in the Netherlands to make the company more efficient and improve corporate governance. The maker of Dove soap and Marmite spread has operated as two companies with offices in London and the Netherlands since its formation in 1930.To go through with the move it needs 75% of shareholders to approve to it in a vote on 26 October, but it is currently meeting resistance from some of the large institutional investors.Unilever has acknowledged that its shares will probably leave the FTSE 100 index due to the move.Already, Legal & General, M&G Investments, Aviva Investors, Lindsell Train and Brewin Dolphin, have all said they would vote against the change. Collectively they hold 9.35pc stake in the consumer goods giant.The latest joining the group was Unilever's seventh-largest shareholder with a 1.18% stake, Columbia Threadneedle on Tuesday."We believe the Unilever restructuring is detrimental to UK Plc shareholders and we will be voting against the proposed resolution at the Unilever EGM on 26 October 2018," said Iain Richards, Columbia Threadneedle's head of responsible investment.Meanwhile, the trade association for investment management firms said it had raised concerns with the government, the Financial Conduct Authority and the London Stock Exchange over individual shareholders potentially not being able to vote on October 26 on the relocation proposals.Liz Field, chief executive of the Personal Investment Management and Financial Advice Association (Pimfa) said: "Our profession is keen to ensure that private investors feel engaged in the companies that they own and [we] are therefore deeply troubled by the potential implications."Last month Aviva Investors said it would vote against the move, with chief investment officer for equities David Cumming saying it would be disappointing to see a company like Unilever leave the UK and would mean longstanding UK shareholders may be forced to sell their stock."I don't see logically why any UK shareholder would support their decision to go Dutch, because there is no upside only downside."