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Unilever grandees weigh Dutch headquarters shift

The consumer goods giant behind Dove and Marmite‎ has opened talks with the trust established by one of the group’s founders as part of a shareholder charm offensive aimed at abolishing its UK headquarters.

Sky News has learnt that ‎Unilever and the Leverhulme Trust – set up in 1925 after the death of William Hesketh Lever, or Lord Leverhulme – are discussing the unification of the company’s legal structure into a single entity based in the Netherlands.

The talks are significant because the board of the Leverhulme Trust, which is the second-biggest investor in Unilever’s London-listed shares, is populated by former grandees from the FTSE-100 group.

Its views on the move will carry huge weight both inside and outside the company.

The Trust’s chairman is Niall FitzGerald, who stepped down as Unilever chairman in 2004; and its other board members include Patrick Cescau, Unilever chief executive until 2008; and Rudy Markham, who stepped down as the consumer goods-maker’s finance director ‎in 2007.

Paul Polman, Unilever’s chief executive for most of the last decade, is also a director of the Trust, but has recused himself from discussions between it and the company over the HQ relocation.

Unilever announced in March that ‎it would axe its 89 year-old dual corporate structure, reorganising as a single legal entity headquartered in the Netherlands.

The company said the shift was largely aimed at simplifying it, although Brexit and the Dutch takeover regime – which is less receptive to hostile takeovers of the kind that Unilever was approached about by Kraft Heinz last year – are thought to have been factors in swinging the decision away from London.

However, the shift has alarmed a growing number of institutional investors in Unilever amid concerns that the company’s probable ejection from the FTSE-100 index will force some fund managers to sell the stock.

Last week, Lindsell Train, which holds a 2.5% stake in Unilever, told the Financial Times that fellow investors should “give serious consideration over the summer as to whether the proposal is in their interest”.

Unilever is due to issue documents relating to the move in the autumn ahead of a vote by shareholders in both its British and Dutch parent companies.

The ballot will require 75% of investors in the UK entity to approve it, but only 50% of holders of the Dutch shares.

The Leverhulme Trust has not yet decided which way it will vote its 5.6% stake in Unilever plc, but any suggestion that it is wavering or contemplating opposing the proposed relocation would be hugely problematic.

Two sources said the company was confident of securing the Trust’s backing.

The Trust was established following Lord Leverhulme‎’s request that a share of his interest in Lever Brothers be used to support charitable causes and research scholarships.

In 1930, Lever Brothers merged with a Dutch margarine producer to form Unilever, which has been one of the world’s largest consumer goods companies ever since.

The Trust’s stake in Unilever plc is worth roughly £7bn.

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Media reports have suggested that Unilever’s new base would be in Rotterdam, but Sky News has previously reported that Amsterdam is likelier to be the company’s new legal home.

Unilever declined to comment on its talks with the Trust, which could not be reached for comment.

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