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Aviva Investors to vote against Unilever plans to move head office to Netherlands

Unilever produces Colman's Mustard.

Unilever produces Colman's Mustard.

PA Wire/PA Images

A row has erupted between Colman’s Mustard makers Unilever and one of its top shareholders Aviva Investors, over the manufacturer’s plans to move its headquarters out of the UK to the Netherlands.

Aviva Investors, part of the Norwich-linked Aviva group, this morning told the BBC that it would vote against the move, as UK shareholders could be forced to sell their shares.

David Cumming, chief investment officer for equities at Aviva Investors, told BBC Radio 4’s Today programme: “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.”

He explained: “This is because clients encourage investors to invest against an index, and if it’s no longer in that index it’s an off-index investment.

“I don’t see logically why any UK shareholder would support their decision to go Dutch, because there is no upside, only downside.”

The company needs 75% of shareholders to back the plan to be able to push it through.

Amid muttering that the £124bn company wants to leave the UK due to Brexit, which the company denies, Mr Cumming suggested that the move could be to protect Unilever from takeovers such as the attempt by food giant Kraft Heinz in 2017.

Unilever chief executive Paul Polman has previously criticised UK laws which make takeovers easier due to shareholder influence.

Unilever has said it is confident that shareholders will back the plans, added: “We have engaged extensively with our shareholders and we believe the vast majority are fully supportive of the board’s proposal.”

However, according to the Financial Times more than a fifth of Unilever’s top 50 shareholders have privately raised concerns about the move.

Lidsell Train holds a 2.5% stake in the company, and has echoed Mr Cumming’s concerns about being forced to sell its stocks “at a time and price not of our choosing”.

Shares in Unilever were flat at £42.57 in morning trading in London.

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