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PRESS: Shell could make London exit if value gap to US does not close

9th Apr 2024 10:21

(Alliance News) - Shell PLC fired a warning shot to that it could be prepared to move its listing to the US in a fresh blow to London's financial centre.

Shell's Chief Executive Wael Sawan told Bloomberg on Monday that the company is looking at "all options" for its listing amid concerns it is under-appreciated by investors.

"I have a location that clearly seems to be undervalued," he remarked, referring to London.

His comments will send alarm bells ringing that Shell, which is Britain's most valuable listed company and worth around GBP183 billion, could become the latest blue chip business to flee the London market.

Shares in Shell rose 0.9% to 2,839.50 pence each in London on Tuesday morning.

For now, Sawan’s solution isn't switching the listing, but fixing Shell, he told Bloomberg.

He’s in the midst of what he calls a "sprint" of 10 quarters to cut costs, shed underperforming units and devote free cash to buying back shares.

"You can worry about the gap - or you could buy the gap," he said.

"I will keep buying back those shares, and buying back those shares, at a discount. That’s a fantastic investment opportunity."

But Sawan added: "If we work through the sprint, and we are doing what we are doing, and we still don’t see that the gap is closing, we have to look at all options," he said.

"All options," he stressed.

Bloomberg noted there are fewer buyers of oil stocks in Europe than in the US, reflecting in part investor apathy toward fossil fuels.

The report suggested a move by Shell would place huge pressure on BP PLC and be a significant blow to the London market.

The London Stock Exchange, which has struggled to attract sizeable new listings, has also suffered a string of high-profile transfers of primary listings.

Building materials firm CRH PLC moved its primary listing to New York in September. Plumbing and heating products supplier Ferguson PLC did the same in May 2022, months after miner BHP Group Ltd shifted its main listing to Sydney.

More recently, Paddy Power owner Flutter Entertainment PLC announced it was looking to move its primary listing to New York in May.

By Jeremy Cutler, Alliance News reporter

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