UK – Unilever, a British-Dutch transnational consumer goods company, has said its board has withdrawn its proposal to move to the Netherlands, after a growing tide of opposition by U.K. shareholders.
The company said that in developing the proposal, the Board was guided by the opportunity to unlock value for shareholders by creating a stronger, simpler and more competitive Unilever that is better positioned for long-term success.
“We have had an extensive period of engagement with shareholders and have received widespread support for the principle behind simplification.
However, we recognise that the proposal has not received support from a significant group of shareholders and therefore consider it appropriate to withdraw,” said a statement from the company.
Marijn Dekkers, Chairman, said: “Unilever has built a long track record of consistent and competitive performance. The Board continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever.
The Board will now consider its next steps and will continue to engage with our shareholders. We will proceed with the plan to cancel the NV preference shares, further strengthening our corporate governance.”
According to the CNBC, an influential proxy advisory firm PIRC recommended shareholders vote against the move, which would have seen the maker of Dove soap and Ben & Jerry’s ice cream kicked off the benchmark FTSE 100 index.
In September, M&G Investments threatened to vote against Unilever’s decision to abandon its London base in favor of a new Dutch holding company.
In a statement to CNBC, the company welcomed the firm’s change of heart.
“We’re very pleased that Unilever has listened to its shareholders and decided to withdraw its simplification proposal.
This demonstrates the value of asset managers actively engaging with their investee companies.”
Investment management firm Columbia Threadneedle is the sixth largest investors in Unilever, according to the most recent filings, holding a recorded US$144 million stake, to which the investor expressed satisfaction at the decision.
“We are pleased with Unilever’s decision to halt its proposed plans. Better approaches are possible and the problems for shareholder were foreseeable.
We agree with the principle of simplification and look forward to engaging with management,” said Iain Richards, head of responsible investment at Columbia Threadneedle Investments.
And investment manager Aviva, which holds around US$9 million worth of Unilever stock, added to chorus of approval after it told CNBC in an emailed statement that it was happy with today’s outcome.
“We are pleased that Unilever has listened to shareholders’ concerns and chosen to withdraw its proposal.
We believe its decision to remain headquartered in the UK in addition to the Netherlands is in the best interests of its UK shareholders and UK plc,” the statement read.
According to The Guardian, business Secretary Greg Clark welcomed the decision to scrap the move.
“Unilever has a long and proud history in the UK and I welcome this decision by Unilever’s board having listened to its shareholders.
The UK is one of the best places in the world to grow a business, and our modern Industrial Strategy commits us to being an open and competitive economy and a great place to locate global headquarters.”
And the Mayor of London, Sadiq Khan, was also quick to welcome the news but took the opportunity to suggest that the decision had little to do with the U.K. government’s recent handling of Brexit.