Directors of the Anglo-Dutch group are reported to be firming up plans for the move today, with an announcement expected on Thursday.
Top ministers, including Prime Minister Theresa May, have reportedly been briefed on the plans, according to Sky News.
On the brink: Consumer goods giant Unilever is on the verge of rubber stamping plans to scrap its London headquarters
The number of London-based staff to be moved or lose their jobs remains unknown. At present, Unilever employs 7,500 people across the UK.
The company previously announced it was in favour of creating ‘single share class’ and that it would maintain listings in the Netherlands, UK and US.
Unilever currently has two headquarters, one in Rotterdam and one in London. It is comprised of two separate listed companies.
Ahead of Brexit, a number of large multi-national companies have announced plans to protect their businesses and shift elements of their operations overseas.
UBS is moving some of its key staff from London to Frankfurt, while Goldman Sachs has already started transferring some of its senior bankers to the German city.
FTSE 100 listed Unilever, which owns a string of household brands including Marmite, Ben & Jerry’s, Dove, Persil, Hellmann’s, and Pot Noodle, has not commented on the reports.
While lingering concerns about the UK’s financial prowess and freedoms in Brexit’s aftermath are likely to have played a role in Unilever’s plans to ditch their dual headquarters, there are other motives.
Proposals: Top ministers, including Prime Minister Theresa May, have reportedly been briefed on the plans. Unilever’s London office is pictured
Key brands: Unilever owns Marmite, Ben & Jerry’s, Persil and Pot Noodle
‘Poison pills’ and hostile takeovers
A ‘poison pill’ is a defensive measure companies can use to protect themselves against hostile takeover attempts.
Typically, a poison pill gives shareholders, other than the would-be bidder firm, the opportunity to buy additional shares in the target company at a significant discount.
Shareholders are usually given this opportunity if an individual or company announces their intention to buy over 15 or 20 per cent of a company’s stock.
Once the poison pill is triggered, the proposed takeover could become very expensive for the bidder, and any target company’s stock previously purchased by that acquiror becomes significantly diluted.
Source: Practical Law Company
Last year, US-based giant Kraft Heinz launched a $143billion hostile takeover bid for Unilever. The deal would have been one of the biggest in corporate history, but was rejected by Unilever, who claimed the offer ‘fundamentally undervalued’ its business.
With Kraft’s hostile takeover of Cadbury’s in 2010 still at the forefront of people’s minds, Kraft dropped their offer to buy Unilever one day later in February last year.
A move to Rotterdam could help Unilever protect itself against future hostile takeover bids. The company would be able to employ ‘poison pills’ to enable shareholders other than the proposed bidder to buy additional shares.
Unilever’s proposed move from London comes amid speculation of chief executive Paul Polman’s retirement, with reports suggesting the group is already looking for a replacement.
In its last set of results, Unilever posted a 9 per cent increase in annual profits to £7.1billion, having enjoyed a strong performance in emerging markets.
The group’s share price is up 0.16 per cent or 6.00p to 3,809.50p.
Smart move? A move to Rotterdam could help Unilever protect itself against future hostile takeover bids
Results: In its last results, Unilever posted a 9 per cent increase in annual profits to £7.1billion