Unilever has been dealt another blow in its bid to convince UK shareholders to back its proposal to move its headquarters to the Netherlands after Legal & General Investment Management (LGIM) said it would vote against the relocation.
The sixth-largest shareholder in Unilever has added its voice to Aviva Investors, Columbia Threadneedle and M&G Investments, which have all warned they will not back Unilever’s proposals to scrap to dual UK-Dutch structure.
Sacha Sadan, director of corporate governance at LGIM, said the UK’s largest asset manager had been a shareholder in Unilever for more than 25 years and engaged heavily with the maker of Dove soap on the proposed relocation.
He added, however: “We do not believe Unilever has made a compelling case for many PLC shareholders to support the recommendation in favour of Dutch incorporation. Therefore, we intend to vote against Unilever’s proposed resolution.”
Media offensive
The lack of support from LGIM comes just days after Unilever carried out a media offensive in an attempt to convince shareholders of the benefits of the move. Marijn Dekkers, chairman of Unilever, on Tuesday urged small UK shareholders to back the company’s proposal to scrap its dual-listed structure and move its headquarters to the Netherlands.
Unilever has argued that simplifying the company under a single holding company in the Netherlands will make it more competitive by making it easier to sell off and buy assets, as well as provide better governance.
If approved by shareholders on October 25th and 26th, the maker of Dove soap will be kicked out of the popular FTSE 100 index, forcing passive funds that use the popular benchmark, as well as many active funds, to sell their holdings.
Copyright The Financial Times Limited 2018
