Shell’s importance compared to other UK or even European stocks is undisputed.
By most measures – be it the FTSE 100 companies ranked by market capitalization or the Assets 500 Europe List that looks at company revenues – the oil and gas giant with a value of $231 billion is the leader.
It was crucial to keep London in the game Hub for large companieseven if the British capital is experiencing an exodus of companies Choosing listings in New York instead of the London Stock Exchange.
But that could change.
Shell is considering “all options” that could help improve its valuation, including moving its listing from London to New York.
“If we work through the sprint and do what we do and we still don’t see the gap closing, we need to look at all options,” said Shell CEO Wael Sawan Bloomberg Opinionand was referring to the “sprint” period to 2025, which aims to increase shareholder returns.
He acknowledged that Shell’s London listing was “undervalued” and explained why its valuations were lower than those of rivals such as ExxonMobil, according to the column.
A Shell spokesman said this Assets that Sawan has since made similar comments last year during the company’s Capital Markets Day. At the time, he talked about reshaping the company through simplification, creating more value with fewer emissions, reducing costs, and more.
The company will wait until next year to consider its options regarding changing its listing.
Sawan’s strategy of exiting underperforming segments has seen him ax some of them Investing in clean energy. Although the move has drawn criticism, Shell says the company is still on track to achieve net-zero emissions by 2050. Investors were also happy with this as the UK-listed company’s shares traded at Record highs.
As British companies look for greener pastures in the US, top bosses report low pay and IPOs feel dull, post-Brexit Britain has seen more discouraging news from the business world than hoped. If Shell decides to delist from London, it would be the worst in a series of setbacks the city has suffered as it would lose its largest FTSE 100 company. But that’s not all – Shell has also paid its shareholders significant dividends that would be lost if the company relocated to America.
In 2023, Shell made a profit $28 billion profit and paid shareholders a total of $23 billion. The company also increased its fourth-quarter dividend by 4%.
Of course, Sawan has expressed skepticism about committing to the UK in the past.
Although the energy giant has had close ties to the country for over 100 years, unclear energy policy and tax hurdles have recently reduced its attractiveness.
On the other hand, Shell was welcomed in the US, where Sawan saw more support, he said in an interview with the BBC.
“Many are wondering whether this valuation gap can only be bridged if we move to the US,” Sawan said, adding that he would not rule out the option even after 2025.
“Ultimately, I’m in the service of shareholder value,” he said.