For all its yearnings to be considered woke, caring and modern, the Unilever board can be a pretty cloth-eared crew. It has taken a change of management to spot that London is a better HQ for a multi-national than Rotterdam. Common sense has prevailed, and the latest iteration of the sensible urge to simplify is a logical conclusion of the push-me-pull-you between the British and Dutch companies.
The previous proposal two years ago was essentially a power grab by the Dutch, and more political than financial. Yet even now, when the motive has long since become obvious, the current CEO is denying that switching from a Dutch takeover of the British company to a British takeover of the Dutch one is a U-turn.
Here’s the (replacement) chairman explaining it to The Times: “It’s a bit like when you’re on a football pitch and your strategy is to score goals in the first half, but you end up scoring in the second half. That’s not a U-turn, it’s an implementation in delay.” And he’s not even double-Dutch, but Danish.
That first proposal was a clear own goal, as I wrote here and here and, risking boring the FT readers, here. But the timebomb was hidden deep in the 120-page formal document, which disclosed for the first time that the deal needed approval from 50 per cent of the Unilever plc shareholders by number, here.
Individual shareholders were expected to be strongly opposed to the migration, not least because of the possible increased tax on their dividends. But since many hold their shares through dealing platforms, there would be no end of trouble deciding the definition of a single shareholder. The deal was dropped and the CEO followed soon after, to spend more time with his Dutch co-conspirators, who quickly abandoned their tax cut plans.
As a sop to wounded Dutch pride, Unilever has promised that if the foods and fats businesses are spun off from the rest, the company will be domiciled in The Netherlands, back to where the originally-merged company came from.
Despite the blunder in the first document, Deutsche Bank has been retained as an adviser to this proposal. Let’s hope the bank has done its homework better, and that there will be too few revolting shareholders in Unilever NV to derail it this time. The rest of us can only rejoice at a sinner that repenteth (sort of).
With friends like these…
It was another exciting new issue for JP Morgan Cazenove, RBC Capital Markets and Macquarie, as exactly two years ago the trio launched Amigo Holdings, a borderline immoral business which combined getting your mate to guarantee your loan with usurious interest rates.
Somehow the trio managed to persuade some dumb clucks of fund managers to value the lender at 275p a share or £1.3bn. Most of the £327m raised went to founder James Benamor, who retained 60 per cent of the shares, with the rest going to his colleagues. The price today? 15p. Mr Benamor could buy back the whole 40 per cent for £30m.
The two years have seen him leave the board, return, leave again and pick a fight with the directors over finding a buyer for the business. Oddly enough, they have not been queuing up. This week the beleaguered chairman, Stephan Wilke, quit the board, as the company provided another £35m – and may need much more – to deal with the backlog of customer complaints.
Yet the bigger mystery is why the Financial Conduct Authority allowed this business to operate at all, let alone to grow as big as it did. Friends and relatives of the borrowers have learnt the baleful meaning of the word “guarantee”. Lockdown, furloughing and unemployment have hardly helped, but Amigo’s 49.9 per cent interest rate preys on the desperate and disadvantaged, even if the guarantor manages to make up the missed payments.
None of this is of any concern to the bankers from JP Morgan, RBC or Macquarie. Amigo is by no means the only obviously dud company floated in 2018; if the banks can persuade the fund managers to pay up, who can blame them?