Top 10 Unilever shareholder may vote against plan to go Dutch

Unilever shareholder Lindsell Train is likely to use at least some of its shares to vote against the company's planned move to the Netherlands, which will cost the consumer goods giant its spot in the benchmark FTSE 100.

The British asset manager - the third-largest owner of Unilever Plc shares, according to Thomson Reuters data - joins a growing chorus of concern against the move, aimed at simplifying Unilever’s dual-headed Anglo-Dutch structure.

“We admire Unilever as a company and have a high regard for its current executive team and board, but on this issue we will vote in the interests of our various clients as we judge appropriate,” Nick Train, co-founder of the British asset management firm, said in an emailed statement.

He spelled out various reasons why its British clients would be disadvantaged by the move to end its dual-headed structure.

He said Unilever ceasing to be a benchmark UK stock was “at the very least an inconvenience” for all UK funds, while those who only invest in the benchmark may become “forced sellers”.

Train also cited “a new risk” from the possibility of a Dutch withholding tax on dividends once Unilever redomiciles to the Netherlands.

He noted the mitigation Unilever has offered against this threat but said the company is not offering “a perpetuity guarantee” that shareholders will never suffer from future changes in Dutch tax policy.

Lindsell Train, which owns a 2.38 percent stake, according to Thomson Reuters data, did not give a breakdown on how many of its clients were based in Britain.
Train’s comments come after a fellow top-20 shareholder, Aviva, told the Financial Times that it plans to vote against the proposal.

A third, Columbia Threadneedle Investments, has also voiced concern about the move, though some non-British investors are more sanguine.

A fourth investor, invested in both the UK and Dutch shares, said it made sense to rationalise the headquarters.

“Having two sets of headquarters and two listings is not always the most efficient,” said the investor, who declined to be identified.

The Unilever move requires approval by 75 percent of UK shareholders and 50 percent of Dutch shareholders. The votes will take place on Oct. 25 in the Netherlands and Oct. 26 in London.

Unilever has said it is “very confident” of securing the required votes.
Unilever shares were down 0.2 percent in London at 1518 GMT.