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Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

Practical discussions about equity High-Yield Portfolios (HYP) for income
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csearle
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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167073

Postby csearle » September 18th, 2018, 3:09 am

Moderator Message:
Discussion of the guidelines of this board should take place on the Biscuit Bar not here.

In the specific case of Unilever the subject has already been done to death there and, after a lengthy debate, one of this site's owners locked the topic and asked for a line to be drawn under the subject.

For those reasons I've deleted the post that started this sub-discussion off and all responses to it. - Chris

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167103

Postby ayshfm1 » September 18th, 2018, 9:13 am

RDSB revenues dividends are routed through Jersey. Without this mechanism Shell Transport and Trading would not have been voted out of existence, I was a holder of Shell back then. I think the arrangement is complex, contrived and probably expensive to operate, which possibly provides the backdrop to Shell joining forces with Unilever and getting the forgetful Rutte to agree to drop the 15% withholding tax.

It also illustrates the political risk to UK shareholders, once we lost Shell T&T we became hostage to the Dutch. In this example there are indeed challenges being made to Shell's arrangement. The Dutch left charge Royal Dutch Shell of avoiding taxes by using Jersey to pay dividends to UK shareholders and want to drag it through EU courts to get it back paid (they compare it to Apple, which is disingenuous in my view). For it's part (an affronted) Shell points out the mechanism was deployed to do exactly that because otherwise it would not have been able to move to Holland, the British might be stupid but they are not so stupid they'd vote for a 15% cut in dividends they receive, which has generated an enormous benefit to the Dutch economy both from taxation, jobs and contract awarded to Dutch Companies that otherwise might not have. It describes the accusations as "mendacious" a word I like.

Still the risk is obvious, those in search of tax revenues can be relied upon to frame the narrative to fit the result they want and foreign shareholder are victims with little consequence in Holland.

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167120

Postby Dod101 » September 18th, 2018, 10:23 am

These two last posts are very interesting.
Moderator Message:
Edited to removed text that does nothing to the flow of the discussion. Please respect the posters with civility please. Raptor.


What the exchange means to me though is that no holder of Unilever PLC shares should vote for the proposals as they stand as it is definitely not in our interests, whether they be an institutional or an individual holder.

Shell's arrangement with incorporation in the UK and management from Holland is therefore simply respecting the two nationalities involved and of course allowing Royal Dutch Shell to remain a significant member of the FTSE100.

Dod

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167124

Postby scrumpyjack » September 18th, 2018, 10:37 am

The more I think about this proposal,the more ludicrous it seems that any UK shareholder should even consider voting for it and the lower my estimation of the board for thinking this is a 'fair' proposal for UK shareholders.

The only conceivable plus in this for UK shareholders is that if we have a Momentum government, a Dutch company may be slightly more insulated from their extreme left policies.

I really do hope the 'City' fund managers look at this objectively and vote against it rather than as usual forgetting their fiduciary duty and rolling over so as not to upset the directors of a very large company.

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167396

Postby Dod101 » September 19th, 2018, 10:06 am

I am very pleased to see that M & G are the latest to report that they will vote against the proposals. There is I think a real possibility that the PLC shareholders can over turn this.

Dod

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167401

Postby Dod101 » September 19th, 2018, 10:19 am

Gengulphus wrote:Of course they considered the Shell model.


That is a categorical statement. I do not know if it is true and neither I suspect does Gengulphus. It is very likely that it is the case but Unilever has not told us that that is so and it tends to illustrate their somewhat arrogant attitude to this whole matter. They have made no real attempt to sell their proposals, for instance that they have looked at the Shell model and rejected it because.........Or that the Netherlands is a better place for incorporation than London because.........They give me the impression that because they have a Dutch chairman and a Dutch CEO it makes sense to become a Dutch company. Then they add nonsense like NV shares have traded with greater liquidity than the PLC shares in recent years. Liquidity has never been an issue with PLC shares so far as I know!

All PLC shareholders should vote down these proposals.

Dod

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167414

Postby ayshfm1 » September 19th, 2018, 10:55 am

I also don't know if they considered the Shell model but I'd be amazed and disappointed if they hadn't. I suspect it might have been plan B if plan A hadn't worked out

I took the very cynical view that Plan A was based on... Mark Rutte (an ex employee of Unilver) being lent on, carrot + stick. First they would have pointed out UK shareholders didn't pay the withholding tax now, so it was Unilever tax neutral to abolish it. Next they would point out the advantages to Dutch economy of the move, with Shell as the poster boy for those advantages. How hard a sell this would be if the shareholders went from not being liable to a withholding tax to being liable. Then to the broader advantages for other multi-nationals who might want to move their headquarter to Holland.

Second the stick. It's on record that Unilever said the abolishon of withholding tax was decisive in their decsion, the stick was probably unless you do we have to go to London.

Plan A worked so no need to consider the Shell scheme.

Anyway I have registered my votes with HFX and they have logged them. Wife holds as well and will get registered as well.

As an aside if Mark Rutte abolishes the tax and ULVR is defeated then Holland will take less tax overall, which clearly wasn't the deal Mark R bought. That could be entertaining.

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167415

Postby pyad » September 19th, 2018, 11:00 am

Zzzzzz...

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167416

Postby Dod101 » September 19th, 2018, 11:04 am

I am glad that pyad is enjoying his sleep. No need for him to be concerned about the possibility of the Dutch Withholding Tax. The joys of Strategic Ignorance.

Dod

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167422

Postby ayshfm1 » September 19th, 2018, 11:20 am

Unilever have shifted their statement on withholding tax at least as far as I can tell, they have moved from UK investors not being liable to not being liable for a long time.

Define "long time"

Stephen is being complacent (IMHO), not that in the great scheme of things any of us can do much (other than sell).

(On the basis that withholding tax is not abolished, it is still expected that it will be)

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167427

Postby idpickering » September 19th, 2018, 11:39 am

I have in the recent past stated that I wouldn't link any more TMF articles here, but for just this once, I'm going to break my stance on this, as folks here might find this very much on topic.

Worried about Unilever’s move away from the UK? Here’s what you need to know

Does it really matter to investors where a company HQ is located? In the case of Unilever (LSE: ULVR), it just might. The global giant’s plan to revamp its dual-headquarter structure that currently means one foot in London and the other in Rotterdam in favour of a Netherlands focus is coming under fire from major shareholders.

The intended move is, according to the company, nothing to do with Brexit — so the timing is just a coincidence, then. But Aviva Investors, which holds 1.4% of Unilever’s stock, is set to oppose the move at the upcoming vote, saying that it would have only downsides for those in the UK.


https://www.fool.co.uk/investing/2018/0 ... d-to-know/

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167438

Postby monabri » September 19th, 2018, 12:18 pm

M&G are adding their support to the "no" vote.

"According to the newspaper ( The Times) , M&G - Unilever's thirteenth largest shareholder - came out against Unilever's plans to scrap its dual UK-Dutch structure, joining other investors who are against it such as Aviva Investors, Lindsell Train and Columbia Threadneedle. Together, the four shareholders own more than 5% of Unilever."


https://www.londonstockexchange.com/exc ... 40000.html

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167447

Postby monabri » September 19th, 2018, 1:05 pm

(sorry, Dod had already mentioned M&G earlier). :oops:

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167465

Postby ayshfm1 » September 19th, 2018, 1:57 pm

NFU Mutual will also vote against. Looking back I see 36% voted against the directors remuneration, I can't help feeling that vote had very little do with what they were paid and everything to do with this up coming vote.

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167477

Postby moorfield » September 19th, 2018, 2:59 pm

pyad wrote:Zzzzzz...

Perhaps pyad was dreaming about the new Company Analysis board?

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167585

Postby Breelander » September 19th, 2018, 11:27 pm

idpickering wrote:I have in the recent past stated that I wouldn't link any more TMF articles here...


Alan Oscroft is one of the 'old school' of TMF writers, so you are forgiven ;)
Last edited by Breelander on September 19th, 2018, 11:34 pm, edited 1 time in total.

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167586

Postby Breelander » September 19th, 2018, 11:34 pm

Dod101 wrote:
ayshfm1 wrote:...If I get the chance I'll vote against it. However because I hold them in a nominee account will I get to vote?


I largely agree. Whether or not you get to vote is down to your nominee/platform. You should without delay ask them.


Mine does (ii, TD Direct, as was). I didn't have to ask, I have already had email notification that the documents were available in my account, as was the ability to vote. FWIW I voted against.

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167850

Postby Gengulphus » September 21st, 2018, 8:20 am

Breelander wrote:Mine does (ii, TD Direct, as was). I didn't have to ask, I have already had email notification that the documents were available in my account, as was the ability to vote. FWIW I voted against.

Yes, ii / TD-as-was are very good on making it easy for shareholders to vote. It's probably worth saying though that it's a feature one can turn on and off, so it may well not be turned on for some (many?) of their clients. To turn it on if it's not turned on at present, one needs to click on "personal details & preferences" on the "account" menu, then on "Update your Preferences", then tick the "I would like to subscribe to the Voting & Information Service" box and click on "Save".

The result will be that you get an email from "INTERACTIVE INVESTOR" (all caps, unlike their usual all-lower-case "interactive investor" emails) each time an opportunity to vote on one of one's companies arises, most frequently in their AGMs. Be warned that most of the things one is asked to vote on (and there are quite a few of them per AGM) are pretty uninteresting formalities - e.g. the one I have for Barratt Developments' AGM at present has 20 resolutions:

1 to "receive" the annual report & accounts
1 to approve the directors' remuneration report (report, not policy - i.e. only backward-looking)
2 to approve dividends (final & special)
8 to elect or re-elect directors
2 to appoint auditors & authorise the audit committee to fix their remuneration
1 to authorise the company to make political donations (*)
1 to approve an employee share scheme
2 to authorise various ways of fundraising by issuing new shares, up to certain limits (**)
1 to authorise share buybacks, also up to certain limits (**)
1 to allow general meetings of the company to be called at 14 days notice (IIRC 21 would be needed without it)

One for BHP Billiton's AGM has just come in - that one has a roughly similar list of 19 resolutions. And I would expect something broadly similar for each share in my HYP. So even a much smaller HYP than mine will have hundreds of AGM resolutions per year that the HYPer could vote on. Unless one is very dedicated (and HYP strategies are in many ways really designed for those who don't want to be very dedicated!), one is at most going give each resolution a very cursory examination... My personal solution to that is basically that I end up not voting at all in many votes, simply through having more important things to do. But I do value easily being able to vote when something more significant than usual comes up, as has happened for Unilever, and ii score highly on that for me.

One other thing to say is that it's so long since I turned the "Voting & Information Service" option on that I don't know what it does if someone turns it on after the email about a vote has gone out but before the voting deadline (ii's deadline is October 22nd for the Unilever votes, by the way - a day or two before the company deadline, presumably to allow the accumulated votes to be passed on to the company). So if one doesn't have it turned on at present, but turns it on now to be able to vote on this issue, I don't know whether one will get an email about it. One might have to go and look in one's "voting mailbox" on the "portfolio" menu, or even conceivably to ask ii to intervene in some way...

(*) This may seem odd, but it's a very standard one, used to deal with a problem in the law about such things: it classifies such things as subscribing to industry associations that sometimes lobby on behalf of the industry as a political donation. Or at least arguably does so - and it's understandable that if there is any doubt about whether it does or not, companies will prefer getting shareholder approval to risking a conflict with the law. The notice of the AGM does normally contain an undertaking not to use the authority to make party-political donations.

(**) Having resolutions to authorise both fundraising and buybacks may seem odd, as they're more-or-less opposites of each other. The explanation is just that both of them are "in case the company needs/wants to" resolutions - it would be rather unusual for both types to be used in the same year. And both are only up to certain limits because their purpose is to avoid the cost of having another general meeting of the company for reasonably small fundraisings/buybacks.

Gengulphus

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167881

Postby mattman74 » September 21st, 2018, 10:04 am

Voted against last Tuesday via interactive investor.
Very easy on their website

A tiny drop, I know, but this is not in my best interests.
I do not want to deal with Dutch witholding tax.

Matt

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Re: Unilever - SIMPLIFICATION OF UNILEVER'S CORPORATE STRUCTURE

#167904

Postby Arborbridge » September 21st, 2018, 11:54 am

Having been away a week, I've missed the essence of why this proposal is so troublesome to us. I can see people here want to vote against it, but I can't see any particular reason why. What's so bad about it, and why would it be deleterious to a UK holder?

OK, it'll drop from the FTSE100 - should I care if I can buy cheaper? It would subject to Dutch laws: should I care about that? I'm sure Dutch laws are quite civilised and even better in helping to prevent take-overs of a trophy company like this.
It will presumably make life simpler for the company if we shoot ourselves in the foot next year, so that seems positive too.

So, what's the fuss about? Pyad seems to have the clearest comment, and maybe I should take his interjection as crucial.

Arb.


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