Unilever admits defeat as London exit plan scrapped

Common sense prevailed at last as the consumer goods colossus gave up on plans to shift its nerve centre from London to Rotterdam. Lee Wild explains the good news.

Unilever's decision to shut its London headquarters in favour of a single base in Rotterdam caused one of the most significant corporate backlashes in recent memory.

So news that the Anglo-Dutch consumer goods giant has today scrapped the plan in the face of widespread opposition has been warmly received.

Had it gone ahead, the maker of Pot Noodles, PG Tips teabags and Colman's mustard would have replaced shares in London-listed Unilever plc – one of two parent holding companies – with shares in Amsterdam-listed Unilever NV.

Now, the business will retain its existing dual-headed legal structure.

Rebecca O'Keeffe, interactive investor's head of investment, said: 

"Unilever's decision to withdraw its proposed plans to move its HQ to Rotterdam is good news for UK plc. The vote had been its own version of Brexit and had not gone down well with its core UK investors. The backlash the company faced from institutional investors meant that the writing was on the wall and it was unlikely that Unilever could have secured the 75% it needed to pass. 

"However, the structure of the vote was also the source of significant anger as the Majority in Number Test disallowed retail investors with nominee holdings the ability to participate. Given the vast majority of retail investors hold their shares in nominee accounts this was ill conceived and risked alienating some of their UK customers. 

"Unilever is a popular stock, held by thousands of interactive investor customers, who have hundreds of millions invested. Almost half our investors had already registered with our electronic voting service to have their voice heard in the main vote. 

"Overall it appears as if common sense has prevailed this morning, but only after Unilever realised their chances of getting the required votes were slim. Their shareholder engagement on the issue has been very poor."