Transatlantic valuation gap is mostly illusory
07/03/2023 11:30
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Liam Proud
LONDON, March 7 (Reuters Breakingviews) - Arm, CRH and
Flutter may pursue US listings, while Shell mulled one. Since
European stocks trade at a discount to the S&P 500, they might
be hoping for a higher price. But the value chasm doesn’t hold
for all sectors, and can be largely explained by differing
growth rates.
Full view will be published shortly.
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CONTEXT NEWS
Arm, the British chip designer owned by Japan’s SoftBank
Group, is likely to aim to raise at least $8 billion from a
public stock offering this year, Reuters reported on March 5,
citing people familiar with the matter. Arm has previously said
that it would pursue a U.S.-only listing, dashing the British
government’s hopes that the group would return to the London
stock market, which it left after SoftBank acquired the company
in 2016.
Building materials group CRH on March 2 said it had
concluded that gaining a primary listing in the United States
would bring increased “commercial, operational and acquisition
opportunities”, without specifying what that meant. The
Dublin-based group said it would provide an update alongside its
next trading statement on April 26.
London-listed bookmaker Flutter Entertainment on Feb. 14
said it would start asking shareholders whether they would
support a secondary U.S. listing. The company said its board had
reached a preliminary view that the move would enhance its
profile in the United States and allow it to reach a deeper pool
of capital. The Irish-based group could eventually pursue a
primary U.S. listing, which would be a prerequisite for gaining
membership of key stock indexes tracked by passive-investing
funds.
(Editing by George Hay and Oliver Taslic)
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