Ashtead to Move Primary Listing to US in New Blow to London
Written by Black Hot Fire Network on December 10, 2024
(Bloomberg) — Construction equipment rental company Ashtead Group Plc delivered the latest setback to the UK stock market as it proposed moving its primary listing from London to the US.
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The US is “the natural long-term listing venue for the group,” according to a statement from Ashtead, which reports in dollars and gets almost all its operating profit from North America.
Separately, Ashtead cut its full-year forecast for rental revenue as a result of commercial construction market dynamics in the US, and announced plans for a buyback program of up to $1.5 billion over the next 18 months. Its shares fell as much as 9.8% in London on Tuesday.
The decision to move its main listing is a fresh blow for London’s capital markets, which have seen a number of big companies — including CRH Plc and Flutter Entertainment Plc — choose to switch their main listings to New York. Last year, chipmaker Arm Holdings Plc decided to go public in New York rather than London, hurting the UK’s reputation as a listing location for internationally-focused companies.
Ashtead has been taking steps since the summer to prepare shareholders. In September, it named an American to replace its British chief financial officer. The company generates over 90% of its revenue from North America, according to data compiled by Bloomberg, and has the majority of its employees in the region.
The company will discuss the proposal with shareholders in “coming weeks,” before putting forward a formal resolution for approval at a general meeting. It expects the process to take 12 to 18 months.
UK companies that move their listing to New York tend to see improved valuations, according to an analysis by JPMorgan Chase & Co published earlier this year. Building materials firm CRH and infrastructure company Ferguson Enterprises Inc. have seen their discount to US rivals narrow significantly, the bank said.
Activist investors have also been pushing UK companies to list overseas. Earlier this year, Dan Loeb’s hedge fund Third Point urged a range of large British businesses to move their listings to New York. He joined the likes of Cevian Capital AB, which last year pressured CRH to move to the US, and has said education publisher Pearson Plc should follow.
