London might face a significant impact from the departure of listed companies, as Shell PLC’s (LSE:SHEL, NYSE:SHEL) leader Wael Sawan hinted at a potential move of its listing to the US.
Sawan, who heads the FTSE 100’s largest company, mentioned in an interview with Bloomberg that Shell is exploring “all options” in terms of its listings.
He remarked on the apparent undervaluation of Shell’s location, seeing it as “a fantastic investment opportunity”.
Sawan expressed his strategy of continuing to repurchase shares at a lower price.
He highlighted the valuation difference between Shell and US-listed oil firms like Exxon Mobil and Chevron.
Sending a message to the LSE, he stated: “If we pursue the sprint [turnaround plan], and the valuation gap persists, we must consider all alternatives.”
For such a primary listing shift, approval from three-quarters of shareholders is required, but the valuation gap with US counterparts like Exxon and Chevron is a frequent point of discussion among analysts.
Shell has previously demonstrated its decisiveness in such matters, having relocated its headquarters from the Netherlands to the UK three years ago and removed “Royal Dutch” from its title.
Recently, London has seen several companies switch to other stock markets, attributed to factors like limited liquidity, Brexit, and higher valuations in US markets.
Firms such as miner BHP, construction group CRH, and travel group TUI have all moved, while UK-based chipmaker Arm was listed in the US by its parent company Softbank.
