Legal & General says it will vote against plan to shift HQ from UK to Rotterdam

This article is more than 1 year old

This article is more than 1 year old

Unilever’s plan to move its headquarters to the Netherlands has run into fresh problems after the company’s sixth-biggest shareholder said it would vote against the switch.

Legal & General Investment Management (LGIM), which owns a near 2% stake in Unilever, is the fourth major shareholder to oppose the move. It follows Columbia Threadneedle, Aviva Investors and M&G in confirming it will attempt to derail the company’s decision to abandon its dual Anglo-Dutch structure in favour of a single base in Rotterdam.

Sacha Sadan, the director of corporate governance at LGIM, said the fund manager had decided to make its position clear after receiving enquiries from clients. The investment manager, he said, been a “supportive shareholder” in Unilever – whose brands include Dove, Magnum, Bovril and Persil – for more than 25 years.

Sadan said LGIM had asked Unilever “to ensure that any approach they take safeguards the ability of our clients to maintain their investment and benefit from Unilever’s continued success”.

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However, he said, the food and personal care group had not made a compelling case for UK investors to vote in favour of Dutch incorporation, adding: “Therefore, we intend to vote against Unilever’s proposed resolution.”

LGIM’s decision came at the end of a week that saw Unilever launch a charm offensive designed to encourage investors to back its plan, which included full-page newspaper adverts .

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Unilever argued that becoming a single entity based in Rotterdam would make the business easier to run. It is not, however, quitting the UK altogether. Two of the group’s three divisions will stay in the UK, and it has no plans for redundancies among its 6,000 UK staff. It made the decision to leave the UK in March, after a long review, and insisted the move was not connected to Brexit.

However, if the business quits the UK it will lose its FTSE 100 status – forcing many investment managers that track the index to sell their holdings. Other investment groups, which have limits on overseas shares, could also be forced to sell up.

The vote on Unilever’s planned switch is scheduled for 25 October. It requires the support of 75% of UK shareholders.