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Triggers_broom 05 Oct 2018

Going Dutch It’s off. BBC News Marmite maker Unilever scraps HQ move The firm behind Marmite, Pot Noodle and Dove soap abandons plans to move its headquarters to the Netherlands.

MartinDrew 04 Oct 2018

PIRC advises shareholders I only have 400 shares ULVR and as it is held via ii as nominee there is not much I can do other than sell, and it seems a bit late to do that now! I wonder how ii are going to vote. I think if the price weakens even more after the vote I might add, after all it is the same company making the same things and so my original reason for buying hasn’t changed - but this fiasco does make you wonder about the management.

Gamesinvestor1 03 Oct 2018

PIRC advises shareholders Pensions & Investment Research Consultants, which advises investors with more than £1.5tn in assets, including local authority pension funds, said shareholders of Unilever’s UK stocks should reject the consumer goods company’s plan to ditch its dual Anglo-Dutch structure. Its advice came as Royal London Asset Management, the UK asset manager, announced it would vote against the move, adding its voice to a growing number of fund managers that have spoken out about the relocation. Shareholders with more than 12 per cent of Unilever’s UK stock, including Aviva Investors, Legal & General Investment Management and Columbia Threadneedle, have already said they are unsupportive of the plans. Their frustration stems from the fact that the company will be kicked out of the FTSE 100 index if the switch goes ahead, forcing passive funds that use the benchmark, as well as many active funds, to sell their holdings. In its advice to clients, Pirc said it was concerned about the impact on investors who could be forced to sell their shares. “The company’s exclusion from the FTSE 100 may compel some shareholders to sell their shares at a price and time that is not of their choosing, effectively resulting in a forced selling decision,” it said. “The company has taken an important step to simplify the governance structure but it hasn’t set out to shareholders what alternative steps could have been proposed that would meet its corporate objectives without the disenfranchisement of a section of shareholders.” Mike Fox, head of sustainable investments at RLAM, which says it holds 0.72 per cent of the company, said many UK Unilever shareholders who backed the resolution were “effectively voting for forced divestment of their holding”. “Unilever might be able to convince European shareholders that the move makes sense for the company and for them as investors in the long term, but it’s hard for a UK investor to see an incentive to vote in favour,” he said. “We think that Unilever is a high-quality company, both in its own right and as a key constituent of a number of UK indices, and have therefore decided to vote against the upcoming resolution.” Games

Gamesinvestor1 03 Oct 2018

More concern ""The trade association for investment management firms has said it is “deeply troubled” by the prospect of some Unilever retail investors being disenfranchised over the company’s plans to relocate to the Netherlands. The Personal Investment Management and Financial Advice Association (Pimfa) said it had raised concerns with the government, the Financial Conduct Authority and the London Stock Exchange over individual shareholders potentially not being able to vote on October 26 on the proposals. - The Times Nearly a tenth of Unilever’s shareholders have publicly committed to voting against the company’s plan to scrap its Anglo-Dutch structure. Columbia Threadneedle, a top 20 shareholder, is the latest investor to join a roster of big City names that have come out against the move. - Telegraph"" Games - 1/10th is not enough but I suspect the many small shareholders will have voted against. I have in my kids portfolio’s but sadly sold my larger holding.

Gamesinvestor1 28 Sep 2018

Going Dutch Bill - I’ve voted with my feet, having sold all my Unilever holding, reluctantly, but not without fear in view of my own feeling for this being badly managed. I lumped over a third of it into RB, which has motored on since then, so that one seems OK for the moment. I’m applying for a chunk of Smithson, as the profile looks good and there is no way I could research or economically invest in the types of companies and locations in the investable universe he talks of in his speech, and I’ll go for the AJ Bell flotation when it’s announced, as a customer of the said platform. The old AA was a disaster wasn’t it m8 – good job it was only a small punt on mine and your part - Woody however has been reamed - yet again. Games

NewBill1703 27 Sep 2018

Going Dutch Gamesinvestor1: No matter - whatever happens happens and only after ULVR has left will we actually know, up until then it’s all conjecture of course. Wise words, Games, wise words… I quite agree. And then we will see whether this is the real “hysterical nonsense”, to borrow your own phrase, or not… Gamesinvestor1: …irrespective of the time leading up to it happening, which is still not a 100% certainty. And yes, I agree with that too… by no means certain they will get this through, and I know that investors are lining up to give Polman a “bloody nose”. On balance I think it will pass, but could be a close call. BTW if it does, I am more than happy if you are right - I might get my chance to buy in at the reasonable price I still await. But I have my doubts… gentleman’s wager on the SP following a FTSE 100 index??

Gamesinvestor1 25 Sep 2018

Going Dutch J_Westlock: Thanks for giving me your permission to go ahead @Gamesinvestor1. We’ve know for four months now what is almost certainly going to happen to Unilever wrt FTSE100 and to a large extent it is already priced in J - Your welcome m8, anytime lol ! – The price isn’t in until the indices actually start selling and that’s when the share price will fall, irrespective of the time leading up to it happening, which is still not a 100% certainty. No one said the Euro Stoxx 50 was insignificant, but the FTSE100 sure is in terms of it’s world ranking - can’t see how that’s in dispute, but I guess some will attempt to do so. On that basis the hearing of the words is your own interpretation that it’s a UK centric view, which you are of course entitled to think, but not really entitled to assume what someone else thinks. No matter - whatever happens happens and only after ULVR has left will we actually know, up until then it’s all conjecture of course. Games

Gamesinvestor1 24 Sep 2018

Going Dutch NewBill1703: we’ve rapidly devolved (apparently willingly) into a Banana Republic “we’ve rapidly devolved (apparently willingly) into a Banana Republic” sounds like hysterical nonsense at the very least. “Prestige, Games? FTSE100 presence? A somewhat UK-centric view indeed” You’ll see what that prestige meant, once (and if) Unilever proceeds with exiting from the FTSE100 - as expressed, coupled with the loss of the bid premium, you’ll see what the market thinks of Paul’s decision to hide Unilever behind a protectionist curtain - my view is that it’s a very big mistake. In terms of UK Centric Views – I don’t have them, but I do have a clear view that the EU is a massive mistake in itself and it’s taking a long long time to unwind it. The longer it lasts, the longer the mess it creates. Games

NewBill1703 23 Sep 2018

Going Dutch Barney_Scott: … the only figures we have so far show that passive funds are becoming more common, not less, so " fewer than there used to be" would seem to be wrong… If you have actual figures for less assets being tied to the FTSE 100 than before, ie going against the general trend, that would be a point. Barney - I am not sure you paraphrase me correctly, the % of money managed in overly passive funds has undoubtedly risen steadily, in the UK as elsewhere - though we have quite a way to go here to reach the levels of passive share in, say, the US. And FWIW, I see this continuing, at least until a major market correction… it is partly a function of what is already a longer than average bull market. My points were really trying to explain the apparent paradox of (as I am regularly told by market trading professionals) FTSE100 entry/departure being less of price changing event than it was in the past. Partly a function of much less “index-hugging” by supposedly active managers (the combination of regulatory attention and competition on charges has seen to that), although hard numbers are (unsurprisingly) scarce here… partly the fact that “passive” funds offer themselves, in the UK as elsewhere, as proxies to an increasingly wide array of indices, national and international, as well as narrower sectoral and factor groupings, etc. Ultimately it is all hard to quantify, as the eventual effect on the ULVR SP… I suspect we will see very little on that score, for the above reasons and those identified by others (eg. correspondingly larger weighting on EuroSTOXX indices). As for the more political/symbolic point about Unilever "abandoning "the UK, and related “prestige” arguments, that is much more a matter of personal opinion - I am agnostic, but I understand the differing sentiments here. I say “will”, but probably should be “would” - the voting rules mean that it may well prove to be a close call in getting it through, with a far from negligible “risk” that ULVR is forced into an embarrassing climbdown. I am also agnostic here, though given my suspicions about Polman’s true motives, I can’t say it wouldn’t be a fitting end to the affair!

Barney_Scott 23 Sep 2018

Going Dutch NewBill, however, the only figures we have so far show that passive funds are becoming more common, not less, so " fewer than there used to be" would seem to be wrong, whether or not the switch for Unilever to being only in Dutch/Eurozone will affect its share price. If you have actual figures for less assets being tied to the FTSE 100 than before, ie going against the general trend, that would be a point.

NewBill1703 23 Sep 2018

Going Dutch Gamesinvestor1: Yes they can buy stock from anywhere but that’s not the whole point behind the prestige of a London listing and a FTSE100 presence. This, coupled with the loss of the bid premium will drive the stock lower. It may happen quickly, or slowly I really couldn’t say. Prestige, Games? FTSE100 presence? A somewhat UK-centric view indeed, as others have pointed out - and god knows, we’re hearing more than enough UK-centric views on things generally ‘en ce moment’… I’m not seeing much “prestige” around these parts, I’m afraid, whichever way I look… as someone wise said recently, we’ve rapidly devolved (apparently willingly) into a Banana Republic, only one without the fruit. You should ask some of the big US money managers - with the really big bucks under management - just how much “prestige” there is in the FTSE100 for any of their holdings. Against that, you may have a point about an eroded big premium… But then, that in itself is merely addressing in a roundabout way the real issue, which is that ULVR is fundamentally expensive still at current levels. As I have long argued, I see fair value much nearer £35-37 and any descent to that area is probably far more down to the historically inevitable mean-reversion than any (minor) technical issue to do with FTSE100 inclusion.

NewBill1703 23 Sep 2018

Going Dutch Barney_Scott: Are you sure? … passive ownership of U.S. equity funds at 37 percent, up from 19 percent in 2009, though that analysis was limited to funds and did not include an estimate of privately held assets… From that article, globally, 17.5% of assets are in index trackers, when non-fund owners (pensions etc.) are counted too. Are you saying the UK has gone against the trend? This paper reckons that, globally, passive funds have gone from about 8% to 20% of assets, between 2007 and 2017. Barney - yes, passive share has been rising steadily everywhere, albeit more slowly - and from a lower base - in the UK. But as J Westlock says, the FTSE100 “is not the only game in town” - only a proportion (not insignificant, but equally not massive) of UK passive money is directly linked to the FTSE100, with a variety of other UK and international indices and benchmarks, eg. factor allocations, being applied. And there is far more money being managed, globally, which will be tied to the indices where ULVR will now have a greater weighting, as pointed out elsewhere. The other trend is the (still much greater) quantum of money being managed “actively” is progressively less and less “tied” to the FTSE100, compared to 10 years or more ago, when so much of that money was effectively index-hugging and hence at least quasi-passive. All in all, as professional market traders will tell you, FTSE100 inclusion or exclusion is much less of a technical factor than it used to be.

J_Westlock 22 Sep 2018

Going Dutch Gamesinvestor1: But if you want to take that risk go ahead. Thanks for giving me your permission to go ahead @Gamesinvestor1. We’ve know for four months now what is almost certainly going to happen to Unilever wrt FTSE100 and to a large extent it is already priced in. Personally, I sold my insignificant stake as soon as the news appeared… as I said… I too believe there will be a net loss in liquidity and also a lower SP (than there would have been without the news/listing event). I certainly intend to get back in though as Unilever is an excellent company and already have a limit order in place on Euronext. Gamesinvestor1: It’s not overstated. It’s a big issue and the ones recognising this are the very individual fund managers you refer to. Yes they can buy stock from anywhere but that’s not the whole point behind the prestige of a London listing and a FTSE100 presence. The EURO STOXX 50 (as one example of one of the Indices where Unilever will have a far higher weighting) is not an insignificant index and is tracked/followed by many ETF’s and Fund Managers too. This isn’t like being relegated from Premiership to Championship (like Babcock a few months back)… it’s more like moving to La Liga… to another top class world index. It’s only when in the UK where I hear the words “prestige of a… FTSE100 presence”… it’s a very UK-centric view of things. If you’d provided an analysis of how the different funds/ETF’s across the world track/follow the FTSE 100 rather than say the EURO STOXX 50… and then calculate how that differential would affect the SP then your advice would have carried more weight.

Gamesinvestor1 22 Sep 2018

Going Dutch It’s not overstated. It’s a big issue and the ones recognising this are the very individual fund managers you refer to. Yes they can buy stock from anywhere but that’s not the whole point behind the prestige of a London listing and a FTSE100 presence. This, coupled with the loss of the bid premium will drive the stock lower. It may happen quickly, or slowly I really couldn’t say. But if you want to take that risk go ahead. Unilever is already handsomely priced, but without the London listing and the bid premium it will return to pre Kraft bid levels. I’ve bet my stake on that outcome by selling what was 4.2 % of my wad. Games

J_Westlock 22 Sep 2018

Going Dutch Barney_Scott: From that article, globally, 17.5% of assets are in index trackers Yes @Barney_Scott that’s no doubt about right but as I mentioned to @Gamesinvestor1, Unilever will have a greater weighting on many European indices (not just Netherlands by the way) … so it isn’t just a case of disappearing off all tracked indices… they will now have liquidity from all the funds/ETFs that are tracking pan-European indices too. I do take the point that the FTSE 100 is… probably… more tracked than the European indices… but I wouldn’t know how to prove that. The FTSE 100 isn’t the only game in town. So… IMHO… yes, NET they will ‘suffer’ some loss in liquidity but you give with one hand and take away with the other.

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