Unilever executives remain confident that shareholders will back a move to base a new single headquarters in the Netherlands as they launched a charm offensive on Tuesday to win over opponents.
The plan by the Anglo-Dutch company to reform a dual-headed structure has become a hot topic in Britain where it has become entangled in the debate over Brexit and its impact on business.
Two main practical concerns are around the forced selling of Unilever shares by some British investors because Unilever will drop out of the benchmark FTSE 100 index, and the future tax treatment of Dutch dividends.
A month before shareholders vote on the move, four top-20 investors have voiced concern or disapproval. Together, they control about 5.5 percent of the British entity's shares, according to Thomson Reuters data.
In a coordinated media offensive, Chairman Marijn Dekkers wrote an op-ed in the Daily Telegraph, while Chief Financial Officer Graeme Pitkethly talked up the proposal on BBC Radio 4's Today programme.
Pitkethly told Reuters that the company believed that its plans would be approved.
"We're still confident. We've had very deep engagement with 200 plus investors over six months," Pitkethly said.
The company decided to collapse its dual-headed structure following a review sparked by last year's unsolicited $143 billion takeover offer from Kraft-Heinz.
It says the move will improve governance and make it more agile, particularly when it comes to big-ticket deals.
David Cumming, chief investment officer of equities at Aviva Investors, a top-20 Unilever shareholder, told BBC Radio that it looked like Unilever was moving to the Netherlands for better takeover protection following Kraft's approach.
"After 90 years with a dual structure, it seems a little bit of a coincidence," Cumming said.
"I think they will struggle, because I don't see logically why any UK shareholder would support Unilever's decision to go Dutch."
Responding to the comment about takeover protection, Pitkethly said "the best form of protectionism is great performance".
He also stressed that the maker of Dove soap and Ben & Jerry's ice cream remained committed to Britain, with over 60 percent of its business run from London.
Blow Before Brexit
Unilever has said that its Dutch future had nothing to do with Brexit. Still, its departure would be a blow for the British government as it struggles to negotiate its divorce from the European Union and preserve its place as a business hub.
Given fast changes in how consumers are eating and shopping, Dekkers said Unilever did not have time to wait for Brexit to take shape before making its move.
"We don't have the luxury to just see how politics develop because we have to move on as a company," he said.
For Unilever's proposal to pass, it needs approval from 75 percent of the UK PLC's voted shares, and 50 percent of the Dutch NV's.
It also needs to be endorsed by a majority of shareholders.
If approved, at votes scheduled for Oct. 25 and 26, the existing shares would stop trading on Dec. 21, with the new shares beginning to trade on Dec. 24.
Index investors, which have strict mandates, make up about 17 percent of the combined shareholding, Pitkethly said. Even though Unilever may get sold by FTSE trackers, he pointed out that the new structure will double its representation in the Eurostoxx 50.
A promise by the Dutch government to scrap its 15 percent withholding tax on dividends was seen as helping to lure Unilever to the Netherlands. Yet the promise faces opposition by domestic critics and has sparked political divisions.
The company has laid out an alternative plan to distribute capital in the event that the tax is not abolished.On Tuesday, Pitkethly called it "a remote circumstance" that the abolition would fall through, and said its workaround plan had passed muster with advisors.