London could be set to experience its biggest blow yet from the exodus of listed companies after Shell PLC's (LSE:SHEL, NYSE:SHEL) boss warned it might move its listing to the US.
Wael Sawan, the boss of the largest company in the FTSE 100, told Bloomberg the oil giant was considering "all options" regarding listings.
" I have a location that clearly seems to be undervalued,” he added.
He said Shell's current undervaluation presented "a fantastic investment opportunity".
“I will keep buying back those shares, and buying back those shares at a discount," he added.
Sawan noted the discrepancy in valuation between Shell and US-listed oil groups like Exxon Mobil and Chevron.
In a clear warning to the LSE, he said: "If we work through the sprint [turnaround plan] and we are doing what we are doing, and we still don’t see that the gap is closing, we have to look at all options.”
Three-quarters of shareholders would have to agree any move of primarily listing, but the valuation gap is a subject raised often by analysts when comparing Shell [and BP] against US peers Exxon and Chevron.
Shell has already shown it can be hard-nosed about these type of decisions as three years ago it shifted its headquarters from the Netherlands to the UK and dropped “Royal Dutch” from its name
London has seen a string of companies defect to other stock markets in the past eighteen months due to limited liquidity, Brexit and the higher ratings afforded by US markets especially.
Miner BHP, construction group CRH and travel group TUI have all left recently while the UK-based chipmaker Arm was listed in the US by its parent Softbank.