FTSE 100 giant Ashtead set to switch primary listing to the US
FTSE 100 firm Ashtead has revealed plans to switch its primary listing to the US in the latest blow to the London Stock Exchange after a flood of exits this year.
After months of speculation, Ashtead, which leases heavy machinery to the construction industry, said on Tuesday that the US market was its “natural long-term listing venue”.
Under the proposal, Ashtead would keep a UK listing in the international companies segment. It aims to shift its primary listing within the next 12 to 18 months.
Officials from the company are set to discuss the plan with investors over the coming weeks before putting it to a shareholder vote.
Ashtead is the 25th-biggest stock on the FTSE 100 with a market capitalisation of £24.6bn. Its share price dropped as much as 11 per cent in early trading on Tuesday.
Although chief executive Brendan Horgan publicly backed Ashtead’s London listing on multiple occasions last year, the 77-year-old firm now makes around 98 per cent of its earnings in North America.
It employs the majority of its workers in that region, which it called “the core growth market for the business”.
Ashtead’s executive management team and operational headquarters are also based in the US. Lucinda Riches, a non-executive director at Ashtead, said last summer that it was “essentially a US business operationally”.
The firm said on Tuesday that other “potential benefits” of a US listing included more exposure to American investors, access to deeper pools of capital and “expanded access to the recruitment and retention of top US talent”.
Some have speculated that Ashtead could be tempted to move its listing to justify bringing executive pay closer to its US peers after experiencing a shareholder revolt over the issue two years ago.
The firm said last year the pay gap with US rivals was “significant” and that its remuneration committee would “address this as a matter of urgency”.
Its latest announcement comes as London’s stock market has been battered by a slew of big firms searching for better returns overseas or accepting takeover deals at hefty premiums.
In recent years, names that have switched to New York include gambling giant Flutter, building materials supplier CRH and plumbing group Ferguson – all with large North American businesses.
Ashtead’s proposal will fuel speculation about the future of other companies on the FTSE 100 which do the bulk of their business overseas.
Food delivery company Just Eat Takeaway said last month that it was set to abandon its secondary London listing.
Separately, Ashtead warned on Tuesday that its annual profit would come in lower than expected due to “local commercial construction market dynamics in the US”, which is set to drag on rental sales growth.