London is the European stock exchange most at risk of suffering big departures to the US, according to a ranking compiled by the Financial Times identifying large companies with the strongest business case to consider a New York listing. The FT assessed 111 European companies, each with a market capitalisation of at least $10bn and each with their shares trading at a discount to US rivals, to determine which have the strongest case to switch to a New York listing. London-listed groups made up just a fifth of the total — but half of the top 10, and 18 of the top 50. The finding is further evidence of London’s vulnerability compared with Paris, Amsterdam and Frankfurt as higher US economic growth forecasts and a larger pool of investors strengthen the business case for a move.
Many groups may decide against switching listings for reasons including fear of political backlash and regulatory hurdles. But yawning valuation gaps combined with a more aggressive US industrial policy mean many will feel investor pressure to explore spinning off their US operations. The trading discount also makes them potential takeover targets. A company’s ranking is based on its valuation discount compared with a group of US peers, the share of its revenues generated in the US and its proportion of North American investors, as calculated and compiled by data provider FactSet.
London-listed Irish construction group CRH, which will put its decision to move its primary listing to New York to shareholders on June 8, tops the league table. It is followed by cigarette maker British American Tobacco and drugmaker GSK, which generates almost half its revenues in the US. Dutch medical devices group Philips ranks fifth. The large London-listed mining groups also feature in the ranking. Rio Tinto ranks 14th and Anglo American — whose spin-off AngloGold Ashanti has announced a move to New York — comes in at 30th, ahead of Glencore (35th).
Other European exchanges are not immune. Italian machinery group CNH Industrial (fourth), has announced its retreat from Milan to make New York its sole listing. German diagnostics group Qiagen (28th) said it “periodically” reviewed its dual listings in New York and Frankfurt.
There are numerous, sometimes insurmountable obstacles to a move, including political opposition, national security and regulatory complexities — banks and defence companies in the ranking are deeply rooted in their respective homelands. Oil group Shell (78th) decided against such a move, while the chief executive of France’s TotalEnergies (54th) told investors it was not an option. BP ranks 42nd.
The economic pull from the US can be felt regardless of a valuation gap: London-listed Flutter, the world’s largest listed gambling company, does not feature in the ranking because it is trading at a premium to smaller US rivals. But the Irish group, which owns US betting platform FanDuel, will launch an additional US listing this year, before seeking shareholders’ approval on moving its primary listing there in the next few years.
Some smaller companies — not captured in the sample — also have reasons to look across the Atlantic. London-listed drugmaker Indivior is planning a secondary listing in New York. Events organiser Informa “would consider” moving to the US given the size of its American business, according to an insider. Dublin-listed consumer goods group Glanbia, which derives more than 80 per cent of its revenues in the US, will start reporting its results in US dollars this year. But for some the cost and distraction of a move may outweigh the benefits. Jon Steinberg, the American chief of London-listed magazine publisher Future who is spearheading a US-first strategy, said he was not considering switching to New York because the business would be too small to catch investors’ attention.
- Employee retention
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- Workforce management
- Recruitment strategies
- Staff turnover
News Source : Anne-Sylvaine Chassany,Patrick Mathurin
Source Link :Flight risk? London listings the most vulnerable to New York’s allure/