Thu, 14th Jun 2018
Unilever says that after moving its headquarters to Rotterdam, the company is extremely unlikely to be in the FTSE 100 or FTSE All Share.
UK shareholders may end up choosing to sell their stake in the company, as it has indicated that it would be leaving the FTSE series after moving from having an Anglo-Dutch HQ structure to just one single headquarters kept in Rotterdam.
The company say that it has deep engagement with FTSE Russel, but that the move of the headquarters would leave it extremely unlikely that it would remain a part of the FTSE UK series.
Unilever is one of the companies with the heaviest weighting in the FTSE 100, currently, and it is a high quality company that owns several major brands including Persil, Dove and Ben & Jerry. It pays good dividends, and it has always been a solid performer and will likely remain such regardless of what index it is in. This means that today’s news is not a reason for investors to automatically sell, especially individuals who are planning to hold for long periods.
Fund managers that need to keep a diverse portfolio, however, may choose to sell and replace the company with another that has a similar weighting in the FTSE. This spate of selling will briefly drive the share price for the company down, but those who are willing to hold on to the shares will likely see a recovery in time.