Royal London Asset Management is the newest shareholder of Unilever to express their objection over the plan of the company to abandon its listing and headquarters in London.
Unilever has aimed to simplify its current dual-headed structure into a single holding Dutch firm, that has a secondary listing on the London Stock Exchange. However, an increasing list of investors has announced their plans to reject the said plan during a crunch vote that is scheduled later this month.
Investors fear that Unilever, the maker of Marmite spread and Dove soap, will be booted out of the FTSE 100 once it moves the whole business to the Netherlands. Thus passive funds that track the FTSE indices would be urged to sell.
Mike Fox, the head of sustainable investments of the Royal London Asset Management, stated: “Many UK Unilever shareholders voting for the upcoming resolution are effectively voting for forced divestment of their holding.”
He added: “Unilever might be able to convince European shareholders that the move makes sense for the company and for them as investors in the long term, but it’s hard for a UK investor to see an incentive to vote in favour.”
He continued: “We think that Unilever is a high-quality company, both in its own right and as a key constituent of a number of UK indices and have therefore decided to vote against the upcoming resolution.
Fox concluded: “Should the motion succeed, we would be forced to sell our holdings in Unilever plc across a number of our funds, something we do not believe would be in the interests of our clients.”
Today, Pensions & Investment Research Consultants (Pirc), the influential advisory firm, also advised the investors to oppose the vote.
The company stated: “The affected holders are likely to be some of the longest held shares – and the Board has been short-sighted to presume that they have no voice. Ultimately, it could be viewed that the PLC shareholders are being asked to consent to a takeover without a premium being paid. In light of these concerns, an oppose vote is recommended.”
Last Tuesday, Schroders and Columbia Threadneedle both confirmed that they would oppose the vote on the 26th of October. They will join a group that already includes Legal & General Investment Management, Brewin Dolphin, Aviva, and M&G Investments.
The company needs 75 percent of the investors that are based in London to approve the move from the Square Mile.
Royal London holds 8.56 million shares in Unilever, which makes up approximately 0.72 percent and is worth around £360 million.
Last week, the chief financial officer of Unilever defended the said move, Graeme Pitkethly, stating: “It’s got great benefits for all shareholders” who will benefit from “a stronger and a simpler Unilever.”