Unilever Investors Opposing Dutch Move Mount as Vote Nears

(Bloomberg) -- Unilever faces mounting opposition from U.K. fund managers over its plan to consolidate its headquarters in the Netherlands.

Columbia Threadneedle Investments, which has about a 1.3 percent stake in the London-listed entity, said it would vote against the food and personal-care giant’s move away from a separate British base. Unilever is expected to be kicked out of the U.K.’s benchmark stock indexes as a result of the shift, potentially forcing funds to sell the company’s London-listed shares.

“We believe the Unilever restructuring is detrimental to U.K. Plc shareholders,” Iain Richards, head of responsible investment at Columbia Threadneedle, said in a statement Tuesday. “We will be voting against the proposed resolution.”

Columbia Threadneedle joins Job Curtis, a fund manager at Janus Henderson Group Plc, who also said Tuesday that he would oppose Unilever’s plan at a shareholder meeting Oct. 26. Curtis runs the City of London Investment Trust, which holds 1.15 million shares in Unilever Plc, the Anglo-Dutch company’s U.K.-listed entity.

Schroders Plc on Monday said it would oppose the headquarters move. The asset manager holds 0.8 percent of Unilever Plc, and a smaller amount of Amsterdam-listed Unilever NV.

“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 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 U.K.’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 once it combines its headquarters in Rotterdam, despite retaining a London listing. U.K. shareholders worry that mass sales of Plc shares will wipe out some of the stock’s gains.

Forced Sales

Legal & General Investment Management said it would vote against Unilever’s relocation to Rotterdam, the Financial Times reported 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, U.K. shareholders of Unilever Plc might face Dutch withholding taxes on their dividends, Lindsell Train said in an emailed statement Monday.

Funds based in the U.K. have little incentive to favor 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.

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