British American Tobacco (BAT) is facing shareholder pressure to move its primary listing from the London Stock Exchange to the New York Stock Exchange. One of the company’s largest shareholders, Rajiv Jain, said it made “no sense” for BAT to remain on the British stock market.
Jen is the founder of the US investment firm GQG Partners, worth 92 billion dollars, and one of the 10 largest shareholders of Philip Morris International, which is listed on the New York Stock Exchange. He assessed that British American Tobacco is “an orphan in Europe,” reports the Financial Times. Moreover, an Indian investor pointed to the difference in valuation of BAT and Philip Morris, asking: “What’s the point of staying in London?”
The appeal of higher valuations and a deeper pool of investors in the US has prompted several moves from London to New York. This month, Cambridge-based chip maker Arm rejected a London listing in favor of the New York Stock Exchange, while CRH, the world’s largest building materials company, has requested an exit from London.
Less and less domestic capital market
The companies mentioned following in the footsteps of the world’s largest sports betting group Flutter Entertainment plc, whose shareholders will vote on the move to the US in April. Shell also considered leaving London and moving to New York but remained in the UK.
The growing debate about the merits of leaving the London market highlights the UK’s difficulty in attracting and retaining companies. Therefore, there is less tendency for British investors to invest less and less in the domestic capital market. British pension and insurance fund share in companies listed on the London Stock Exchange has fallen from 50 to four percent of the portfolio this century.