Who will win the Anglo-Dutch struggle to woo Unilever? | Nils Pratley

Paul Polman, chief executive of Unilever, is a considerate fellow. Instead of infuriating either Theresa May or her Dutch counterpart, Mark Rutte, at a delicate moment in the Brexit talks, he will do so at a later date. The Anglo-Dutch consumer goods giant had said it would choose between London and Rotterdam for its sole headquarters by the end of this year. Now the announcement will come “in due course.”

Only 100 jobs or so will be affected directly, but do not doubt that the location of Unilever’s HQ matters to politicians. Look at what has happened since April, which was when the Dove-to-Lipton group launched the review of its dual-headed Anglo-Dutch structure.

Mark Rutte, the Dutch prime minister – a former employee of Unilever, note – has risked a political storm by planning to overhaul local tax rules on dividends so as not to penalise international investors in Dutch companies. He will look a fool if Unilever refuses his red carpet.

In the UK, there is a proposal to change the takeover code to the advantage of defending companies. Polman, it so happened, had been complaining about unlevel playing fields, despite Unilever’s great escape from Kraft Heinz’s financial engineers. The tweak may not satisfy his worries, but it’s something and was supposed to be symbolic of May’s preference for Unilever-style long-term capitalism.

The Rotterdam threat is said to terrify UK ministers and you can understand why. Losing a top-10 FTSE 100 company during the fog of Brexit would look terrible. Worse, Shell, which is equally Anglo-Dutch but even larger than Unilever, might follow, just at the moment the City is supposed to be luring Saudi Aramco.

Who will win? It’s possible Unilever’s directors really are undecided. But it remains the case that Unilever has a Dutch chairman and Dutch chief executive. The pair will do their fiduciary duty and all that, but sometimes home advantage in the boardroom counts. Even in extra time, you’d bet on the Netherlands.

Don’t stress, banks are braced for the next crisis

Better European news: the UK’s big banks can withstand a hard Brexit, judges the Bank of England.

This development is obviously welcome, but don’t get too excited. First, if any bank had failed the Bank’s stress tests, it would be late in the day to run around trying to raise fresh capital.

Second, the stressed picture of Brexit painted by the Bank doesn’t sound comfortable for the rest of us. Threadneedle Street tested for a doubling in the rate of unemployment, a 4.7% fall in GDP, a 27% drop in the pound and a rise in interest rates from 0.5% to 4%. Governor Mark Carney said this would describe “the outer bounds” of disorderly Brexit. The inner bounds don’t sound nice either.

Third, the bank’s ability to keep lending to the UK economy after a hard Brexit is not the whole story. The Bank takes account of “management actions,” including the sacrifice of shareholders’ dividends. If dividends were to be binned, share prices would fall and, since the average pension fund has a good helping of financial stocks, most of us would be poorer.

Still, let’s not panic. It is also plainly true that the UK banking system has been transformed from its junk-ridden and over-leveraged state of 2008. The Bank reckons banks now hold £222bn of the best type of capital, an increase of £115bn from the depths of the financial crisis. Is that enough? Nobody really knows until the next crisis arrives but “resilient” – the Bank’s word – is a credible description.

Time is up for London Stock Exchange CEO

Xavier Rolet, the chief executive of London Stock Exchange, should take a hint: it’s time to bow out. Certainly, the Carney cavalry is not about to arrive to save his job. “I can’t envision a circumstance where the CEO stays on beyond the agreed period,” said the governor.

So, tough luck, The Children’s Investment Fund (TCI), the hedge fund that had called on regulators to intervene to resolve what it calls “a corporate governance crisis”. TCI wants Donald Brydon, the LSE chairman, to be sacked and Rolet to continue his successful stint as boss.

If TCI is to get its way, it will have to convince other shareholders, a task that was daunting before Carney’s comments and is harder after them. “We knew about the succession plan, we’ve stayed close to the situation,” he said. In other words, the Bank saw nothing amiss: boards are allowed to change the chief executive, even if he or she doesn’t wish to go.

Brydon and the other non-executives, as argued here more than once, were shockingly arrogant in not explaining their thinking to shareholders – and it’s good that they are forced by TCI to do so. But, barring a miraculous turn of events, Rolet will still be leaving.