Royal London joins group of investors preparing to vote against Unilever Netherlands move
Royal London Asset Management is the latest Unilever shareholder to speak out against the company's plan to scrap its London listing and headquarters.
Unilever has proposed to simplify its current dual-headed structure into a single holding Dutch company, with a secondary listing on the London Stock Exchange, however a growing list of investors have announced their intentions to reject the plan at a crunch vote later this month.
Read more: Unilever shareholder Schroders says it will vote against Dutch move
Investors are concerned Unilever, the maker of Dove soap and Marmite spread, will be booted out of the FTSE 100 if it moves the whole business to the Netherlands, meaning passive funds that track FTSE indices would be forced to sell.
Royal London Asset Management head of sustainable investments Mike Fox said: "Many UK Unilever shareholders voting for the upcoming resolution are effectively voting for forced divestment of their holding.
"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.
"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.
"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.”
Influential advisory firm Pensions & Investment Research Consultants (Pirc) today also said investors should oppose the vote.
"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," the company said.
Yesterday, Columbia Threadneedle and Schroders confirmed that they would oppose the vote on 26 October, joining a group that includes Brewin Dolphin, Legal & General Investment Management, M&G Investments and Aviva.
The firm needs 75 per cent of London-based investors to approve the departure from the Square Mile.
Royal London holds 8.56m shares in Unilever, which makes up 0.72 per cent and is worth approximately £360m.
Last week, Graeme Pitkethly, Unilever’s chief financial officer defended the move, saying: “It’s got great benefits for all shareholders” who will benefit from “a stronger and a simpler Unilever”.
Read more: L&G joins shareholders who will vote against Unilever leaving London