Unilever's move to Netherlands faltering: report

The relocation of Unilever's head office to the Netherlands may be faltering. British shareholders are increasingly threatening to vote against the British-Dutch multinational's plan to move to Rotterdam, sources around the multinational told the Volkskrant.

Unilever is currently a British-Dutch company with two shares and two head offices, one in London and one in Rotterdam. In order to "operate more decisively" Unilever, under the leadership of CEO Paul Polman, decided in March to become a purely Dutch company with one type of shares and its head office in Rotterdam. But shareholders still have to approve this move in votes later this month.

No opposition is expected from the Dutch shareholders, who will vote on the move at the shareholders' meeting in Rotterdam on October 25th. But the British shareholders' vote on October 26th is much less certain. At least 75 percent of British shareholders must vote for the move. Around 10 percent already said they would vote against, according to the newspaper. Whether the proportion of no voters will rise above the 25 percent limit, depends largely on the voting advice two large consulting firms will give to investors. This advice is expected late this week or early next week.

Unilever's chief commissioner Marijn Dekkers reported in British media that the move is mainly a paper operation - the main division will stay in London and the move won't cost British jobs. According to Dekkers, the support among shareholders is "enormous".

But according to the Volkskrant's sources, that support is waning now that the move is actually approaching. If Unilever officially becomes a Dutch company, it will be removed from London's stock exchange FTSE-100. That means that British shareholders that invest in that index will have to sell their Unilever shares. The British shareholders also worry that the company's value will decline in the Netherlands, where it is better protected against hostile takeovers.

If the 75 percent majority is reached in the vote on October 26th, a second round of voting will follow in which 50 percent of all investors must approve the vote. In this the voice of a private investor with 10 Unilever shares counts the same as that of a pension fund with 10 million shares - one man, one vote, according to the newspaper. With large investors, Unilever can still count on reasonableness, but convincing the almost 40 thousand British private investors may be a different story. In the midst of the rising Brexit rhetoric, they're watching 'their' Magnum, Dove and Marmite move to the European mainland. Only on paper, but the question is whether private investors can make that distinction, according to the newspaper.

If Unilever's move to the Netherlands falters, it will have far-reaching consequences. For CEO Polman and commissioner Dekker, who will likely not be able to keep their posts if their blueprint for Unilever's next 50 years is shot down. But also for Prime Minister Mark Rutte, who largely based his controversial plan to abolish dividend tax with this move in mind, the newspaper writes.