But the U-turn knocked investor confidence in the credibility of the management team, with some shareholders and analysts suggesting there could be some changes at the board level.
Helal Miah, investment research analyst at The Share Centre, said markets had previously expected chief executive Paul Pollman to step down next year but now that could come sooner.
"The recent U-turn over the relocation of head offices to the Netherland’s leaves a lot of investor’s bitter that management did not pay enough attention or respect to their concerns," he said.
"Investor’s confidence in the management has been shaken and many will wonder if a management shakeup will be coming sooner than expected."
Leadership 'must be called into question'
AJ Bell investment director, Russ Mould, said leadership must be called into question after misjudging the market mood in the run-up to the proposed move.
The reason more than a third of Unilever’s UK investors had been against the plans was because they were worried the group would be ejected from the FTSE 100, forcing funds that track the index and funds that buy only UK stocks to sell their shares.
Unilever’s argument was that it wanted to simplify its complicated dual structure, which was created through the merger of a Dutch margarine producer and a British soap maker 89 years ago.
In an announcement on the company’s decision to scrap the plan earlier this month, chairman Marijn Dekkers said the board “continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever”.
He said the board would consider its next steps and continue to engage with shareholders.
Unilever engaging closely with shareholders
This week, the company tried to soothe concerns that it does not listen to its shareholders, promising to involve them more in decisions.
Unilever’s senior executives, Peter Newhouse, told the Business, Energy and Industrial Strategy (BEIS) Committee that the company is engaging with investors and has planned meetings throughout this month.
He said the company, which owns Marmite, Dove soap and PG Tips tea, would discuss with shareholders the failed relocation plan and the opposition to its proposals on pay.
When asked if Unilever had a good record of engaging with shareholders, Newhouse said: “Everybody could improve.”
Management needs fresh ideas, says analyst
Neil Wilson, chief market analyst at Markets.com, said management has been left bruised by the botched sole-listing affair.
“They need to come up with fresh ideas and we question whether the leadership will remain the same for long,” he said.
Unilever today reported its third quarter results, which showed underlying sales rose 3.8% with growth across all three divisions – beauty and personal care, home care, and foods and refreshment. For the year, the company said it continues to expect underlying sales growth of 3% to 5%, an improvement in underlying operating margin and strong cash flow.
However, shares declined as the quarterly sales missed analysts’ expectations. Around noon, shares were down 1.3% to 3,969p.
“Despite the events at Unilever, the recent market sell off and rising dollar strength, the shares at the moment remain relatively unchanged since the start of the year,” The Share Centre's Miah said.
“Overall, it is a defensive company which offers growth opportunities by way of its ever-expanding exposure into the emerging markets which is one of the key reasons we have it on our ‘buy’ list and we are happy to continue to do so for investors seeking a balanced return and willing to accept a medium level of risk.”