Unilever has intensified its charm offensive on the City investors as it attempts to combat a heightening shareholder revolt because of its plans to ditch its headquarters in London.
The consumer goods titan has organised some meetings with the majority of the vocal opponents of its plans as it tries to assuage their concerns, even though its efforts to change minds have so far fallen on deaf ears.
Todat, the top management of Unilever came out fighting amid the heightening pressure from investors based in London who fear of being forced to sell their shares as the company drops out of the FTSE 100.
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”.
The company makes household-name brands including PG Tips and Marmite. It plans to abandon its public limited company (Plc) in the United Kingdom in favour of a single Dutch company that is primarily listed in Rotterdam.
Huge investors in the Square Mile who owns a significant amount of shares in Unilever, including Brewin Dolphin, M&G Investments, Columbia Threadneedle and Lindsell Train, have all been opposed to the move. It requires the consent of 75 percent of the votes that are attached to shares listed in London in a crunch vote that is scheduled for the 26th of October.
It also need the support of at least half of the Dutch shares, and a majority of those from individual shareholders.
While the shares will still continue to be listed in sterling on the London Stock Exchange, its absence from the blue-chip index of the United Kingdom implies that some investors will be forced to sell their shares in order to satisfy their investment mandates.
The executives of Unilever have privately expressed their confidence that they will win the approval in spite of the City opposition.
Tonight, the chairman pf Unilever, Marijn Dekkers, urged small shareholders in Britains to support the company. He said that the indexation concerns will only apply to bigger investors.
In an interview with the Financial Times, he 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.”
Some investors also worry that dividend payments by the Dutch company could be liable for withholding taxes which will lesen the returns for investors who are outside of the Netherlands.
However, earlier in the day, Pitkethly informed BBC radio that “there will be no additional taxes for ex-Plc shareholders.” He added that the public criticisms made by David Cumming, the Aviva Investors boss were “incorrect.”
The move of Unilever was partly prompted by a desire to ward off approaches such as the the one that it received from Kraft Heinz, a US giant, in 2017.