M&G Investments adds to pressure on Unilever to back down on abandoning London PLC
M&G Investments today became the latest major investor to threaten to vote against Unilever's decision to abandon its London PLC in favour of a new Dutch holding company.
The maker of Marmite and Dove soap is under severe pressure from City investors, who fear they could be forced to sell the shares in funds limited to FTSE 100 firms only.
Top 25 investors Aviva Investors, Lindsell Train and Brewin Dolphin have all revealed their intention to vote down the proposals, while Columbia Threadneedle has also expressed serious concerns.
Read more: Unilever facing growing shareholder revolt over plans to abandon London PLC
Rupert Krefting, head of corporate finance and stewardship at M&G Investments, said: “We do not support Unilever’s proposal to redomicile to the Netherlands as the company has not adequately persuaded UK shareholders and we therefore intend to vote against it in the interests of our investors.
Unilever insists that the "vast majority of investors are supportive of the proposal to simplify the company structure", according to a statement this week from a spokesperson. However, only 25 per cent of votes in the London PLC are required to prevent the decision being passed.
The consumer goods giant, plans to change its current dual-headed structure, with a British publicly limited company (PLC) alongside a Dutch limited company (NV), in favour of a single NV. The primary listing will be in the Netherlands, so shares traded in London will no longer be eligible for the FTSE indices.
UK-based investors could also potentially lose out compared to shareholders in the Netherlands if a Dutch withholding tax is imposed on dividend income – a key attraction for investors.
"The downsides for UK funds include being forced sellers and taxation uncertainty surrounding future dividend payments to shareholders”, Krefting said.
Read more: Unilever shareholder in 'revolt' over company move to Amsterdam