A Unilever sign. Picture: BLOOMBERG/DARIO PIGNATELLI
A Unilever sign. Picture: BLOOMBERG/DARIO PIGNATELLI

London — Unilever faces mounting opposition from UK fund managers over its plan to consolidate its headquarters in the Netherlands.

A fund manager at Janus Henderson Group said he would oppose the food and personal-care giant’s move away from a separate British base, joining the likes of Schroders. Unilever is expected to be kicked out of the UK’s benchmark stock indices as a result of the shift, potentially forcing funds to sell the company’s London-listed shares.

“I think it preferable for Unilever to remain in the UK FTSE indices and subject to the UK’s more open system for corporate control,” said Job Curtis, who runs Janus Henderson’s City of London Investment Trust.

Curtis said on Tuesday that he plans to vote against the Anglo-Dutch consumer giant’s move at a shareholder meeting on October 26. The fund holds 1.15-million shares in Unilever Plc, the Anglo-Dutch company’s UK-listed entity. Morningstar reported the news earlier.

On Monday, Schroders said it would oppose the headquarter’s move. The asset manager holds 0.8% of Unilever Plc, and a smaller amount of Amsterdam-listed Unilever NV.

Forced sales

“We understand the company’s desire for simplification but we do not believe this is the right decision for Unilever Plc shareholders,” Jessica Ground, Schroders global head of stewardship, said in a statement on Monday. She cited concerns about a protectionist trend in the Netherlands, as well as the prospect of forced sales of Unilever Plc shares by clients who track the UK’s FTSE 100 stock index.

The maker of Dove soap and Ben & Jerry’s ice cream has said it almost certainly won’t be able to stay in the FTSE 100 when it combines its headquarters in Rotterdam, despite retaining a London listing. UK shareholders worry that mass sales of the Unilever Plc shares will wipe out some of the stock’s gains.

Legal & General Investment Management said it would vote against Unilever’s relocation to Rotterdam, the Financial Times reported on Friday. M&G Investments, Aviva Plc and Lindsell Train have also said they intend to vote against the proposal at the meeting this month in London. Besides possible forced sales, UK shareholders of Unilever Plc might face Dutch withholding taxes on their dividends, Lindsell Train said in an e-mailed statement Monday.

Funds based in the UK have little incentive to favour the simplification of Unilever’s corporate structure, meaning the outcome of a vote by Unilever Plc shareholders is “by no means guaranteed”, Avalon Capital Markets wrote in a note to investors last month.

With Suzy Waite

Bloomberg

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