The asset management arm of insurer Aviva PLC (LON:AV.) has said it will vote against a proposal by consumer goods giant Unilever plc (LON:ULVR) to scrap its FTSE 100 listing and move its HQ to the Netherlands.
Aviva Investors, which owns a 1.4% stake in Unilever, would not receive any added value from the firm's move out of the UK’s blue-chip index said David Cumming, its chief investment officer for equities, adding that they did not see “any justification” for the move and encouraged other institutional investors to vote against the plans.
READ: Unilever outlines simplification plan to become single holding company
Speaking to BBC Radio 4’s Today programme, Cumming said Unilever would “struggle” to convince the required number of shareholders as he saw no logical reason why they would support Unilever’s decision "because there is no upside but there is downside”.
For the proposal to pass, Unilever must receive the backing of 75% of UK shareholders and 50% of Dutch investors in separate votes in Rotterdam and London on 25 and 26 of October respectively.
The firm is arguing that a simplification in the company will improve governance and make it easier to buy and sell assets, adding that 55% of its shareholders are based in the Netherlands and thus shares listed in Amsterdam are more liquid.
If Unilever does leave the FTSE 100, it would deal a major blow to London’s status as a global financial centre, while also forcing multiple UK tracker funds to sell their holdings in the company.
In late-afternoon trading, Unilever shares were down 0.3% at 4,246.5p.