Unilever cancels plan to move headquarters from London to Rotterdam after Brexit

Unilever was created in 1929 by the merger of Britain's Lever Brothers and Margarine Unie of the Netherlands

A growing list of British institutional refuseniks and the prospect of a retail investor rebellion in the context of Britain's planned exit from the European Union prompted the company to reverse course and ditch the plan on Friday, three weeks before it was to be voted on.

After resistance from shareholders, however, the company will instead retain both its headquarters in the United Kingdom and the Netherlands.

"Despite the government's appalling mishandling of the Brexit negotiations, the capital will always be one of the best cities in the world in which to do business", London Mayor Sadiq Khan, a member of the opposition Labour Party, said on Twitter.

One of the main points of opposition was that Unilever would likely be ejected from the FTSE 100 - having been an original constituent in 1984 - and the FSTE All-share.

The Investor Forum, which works to escalate investor concerns to companies, said it worked with over 20 institutions on this issue.

A spokesman said: 'We have had an extensive period of engagement with shareholders and have received widespread support for the principle behind simplification.

The move to a single Dutch base could have afforded Unilever greater protection against takeovers, after the company fended off an unwanted approach from Kraft Heinz Co. past year.

The biggest performance drivers now are USA interest rates and difficulties in emerging markets, particularly related to currencies, said Liberum analyst Robert Waldschmidt. Shareholders were set to vote on the plan at the end of the month.

"It would have been like a vote of "no confidence".

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Shareholders representing about 12% of Unilever had publicly opposed the move, concerned about the effective forced selling of their shares with no premium, uncertainty around the future tax treatment of Dutch dividends and a perception that the move was partly aimed at securing greater takeover protection under Dutch law. The threshold for an expected 80 percent turnout was correspondingly lower.

Unilever announced the plan in March as part of a package of structural changes that would make it "a simpler, more agile and more focused business".

Shareholders paint a different picture.

Unilever, which is Britain's third biggest company, said it had listened to its shareholders and will remain in the United Kingdom instead of the Netherlands for now. "They simply. viewed us as casualties of war".

Unilever CEO Paul Polman told reporters on Friday that the public debate about the controversial measure had an impact on British shareholders.

Two sources suggested that Chief Financial Officer Graeme Pitkethly, who was heavily involved in this effort along with Dutch Chairman Marjin Dekkers, may have edged lower in the company's internal ranking after the debacle.

He said he didn't see the U-turn as a black eye, but rather something they just tried and didn't work.

"If we can get behind Brexit and get an agreement, then I think there will be scope for that to rebound".

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