Ferguson PLC (LON:FERG), the distributor of plumbing and heating products, is to list its shares in the US and bin its American Depositary Receipts (ADR) arrangement.
The company, which is in the process of demerging its Wolseley operations in the UK, has put forward two proposals to its shareholders; the first entails an additional listing in the US, which would see it remain eligible for inclusion in the FTSE 350, and the second entails making its primary listing the US one and changing its London listing from premium to standard, which would preclude it from being included in the FTSE 350 but would make it eligible for inclusion in US stock indices.
Whichever option shareholders vote for, the board of Ferguson reckons the new arrangements could be done and dusted before the end of June.
"In assessing Ferguson's future listing structure, the board's approach has been to consider carefully what is in the best interests of the company and its stakeholders over the long-term. The board believes that Ferguson's natural long-term listing location is the USA but it is mindful that this is a complex issue for many of our existing shareholders,” said Geoff Drabble, the chairman of Ferguson.
Fellow FTSE 100 constituent Unilever PLC (LON:ULVR) put a lot of noses out of joint in the City in 2018 when it proposed switching its main listing to the Netherlands and thus surrendering its FTSE 100 status and it seems that Ferguson is anxious to avoid a similar fall-out with City institutions.
“We will now commence a period of further consultation with our major institutional shareholders and will listen carefully to their feedback before setting out any firm proposals in the spring," Drabble added.
The company also announced a new US$500mln share buy-back programme today that will be in effect over the next 12 months.
Update on assessment of listing structure and share buy back announcement https://t.co/bVOXr071ts
— Ferguson PLC (@Ferguson_plc) February 4, 2020