Legal & General (L&G)’s investment arm is set to vote against the plans of Unilever to vacate its headquarters in London and the FTSE 100 in order to solely incorporate in the Netherlands this coming October.
The investment titan took the unusual step of announcing its voting plans prior to the crunch shareholder meeting of Unilever that is scheduled on the 26th of October to decide on the company’s future.
Unilever is behind brands such as PG Tips and Marmite. It aims to simplify its dual-listed structure by abandoning its headquarters in the capital to call just Rotterdam home.
The director of corporate governance at L&G’s investment management arm (LGIM), Sacha Sadan, said that his firm would be joining a growing shareholder revolt against the plans of Unilever.
Sadan stated: “We do not believe Unilever has made a compelling case for many Plc shareholders to support the recommendation in favour of Dutch incorporation.”
He continued: “Therefore, we intend to vote against Unilever’s proposed resolution.”
The firm joins other Square Mile investors with huge shareholdings in the consumer goods company who are set to vote against the proposed move.
Brewin Dolphin, M&G Investments, Columbia Threadneedle, and Lindsell Train, have all expressed their objections to the desire of Unilever to quit the capital, which will only receive the green light with the consent of 75 percent of the votes that are attached to London-listed shares.
Sadan further stated: “As a supportive shareholder in Unilever Plc for more than 25 years, we have engaged with the company on a number of issues including its decision to unify its corporate structure.”
He added: “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. As part of our engagement with Unilever we have also worked with the Investor Forum to engage collectively with other investors.”
Unilever has engaged on a PR offensive to convince the UK shareholders to vote in favour of the company’s plans. Recently, it even took out a full-page advert in The Times and ordered its highest-ranking executive to talk up the said move.
Last week, the chief financial officer of Unilever, Graeme Pitkethly, stated: “It’s got great benefits for all shareholders” who will benefit from “a stronger and a simpler Unilever”.
During an interview with the Financial Times, Marijn Dekkers, the chairman of Unilever, stated: “Maybe they’ve seen the headlines with some UK shareholders being hurt by the plans, but that doesn’t mean that applies to them.” His comments were believed to be an attempt to woo smaller shareholders.