The investment arm of Legal & General (L&G) is set to vote against Unilever’s plans to ditch its London headquarters and the FTSE 100 to incorporate solely in the Netherlands next month.
The investment giant took the unusual step of revealing its voting plans before Unilever’s crunch shareholder meeting on 26 October to decide its future.
The firm behind brands like Marmite and PG Tips wants to simplify its dual-listed structure by quitting its headquarters in the capital to call just Rotterdam home.
Sacha Sadan, director of corporate governance at L&G’s investment management arm (LGIM), said his firm would join a growing shareholder revolt against Unilever’s plans.
“We do not believe Unilever has made a compelling case for many Plc shareholders to support the recommendation in favour of Dutch incorporation,” he said. “Therefore, we intend to vote against Unilever’s proposed resolution.”
It joins other Square Mile investors with big shareholdings in the consumer goods company who are set against the proposed move.
M&G Investments, Brewin Dolphin, Lindsell Train and Columbia Threadneedle have all objected to Unilever's desire to quit the capital, which will only get the green light with the consent of 75 per cent of the votes attached to London-listed shares.
“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,” added Sadan.
“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 gone on a PR offensive to persuade UK shareholders to vote in favour of its plans, taking out a full-page advert in The Times recently and ordering its highest-ranking execs to talk up the move.
Graeme Pitkethly, Unilever’s chief financial officer, last week said: “It’s got great benefits for all shareholders” who will benefit from “a stronger and a simpler Unilever”.
“Maybe they’ve seen the headlines with some UK shareholders being hurt by the plans, but that doesn’t mean that applies to them,” added chairman Marijn Dekkers in comments to the Financial Times, in a bid to woo smaller shareholders.