Aviva Investors, a top Unilever shareholder, has said it will reject a planned move for the British-Dutch firm to move its headquarters to the Netherlands.
Unilever, a consumer goods company which produces Marmite and Dove soap, signalled its intention in March this year to close its UK headquarters in favour of its office in Rotterdam.
The company is one of the biggest firms in the UK’s FTSE 100 share index with a market value of about £124bn.
However, under UK rules it would no longer be eligible for inclusion in the FTSE 100 in London after the proposed change.
Aviva Investors are fearful of the move as they argue it could cause a rush for the exits to sell the stock, which would subsequently lead to major losses for the company.
David Cumming, chief investment officer for equities at Aviva Investors said today that: “Aside from the fact it is disappointing to see a world-class company like Unilever leave the UK, it also means longstanding UK shareholders may be forced to sell their stock.
“I don’t see logically why any UK shareholder would support their decision to go Dutch, because there is no upside only downside.”
The Financial Times has reported that it is not just Aviva Investors who have expressed concern about the relocation; with 50 investors privately condemning the move.
Lindsell Train, another major investor, has echoed Mr Cumming’s concerns about becoming a forced seller “at a time and price not of our choosing”.
Lindsell Train held a 2.5% stake in the company as of July, while Aviva holds 1.4%. Other shareholders include BlackRock, the world’s largest asset manager, and Leverhulme, both of which hold more than 5%.
A Unilever spokesman said the company was confident it would win the approval of shareholders: “We have engaged extensively with our shareholders and we believe the vast majority are fully supportive of the board’s proposal.”Shares in Unilever were flat at £42.57 in morning trading in London.
Nevertheless, the unrest amongst major shareholders will be a concern for Unilever, who will have to make a strong case for the relocation. Whilst there have been many who have pointed to the relocation as a concern for Brexit Britain, Unilever does insist that Brexit is not the reason for the move but rather it is a simplification of the business operations.