BAT boss shuns shareholder calls to relist in New York
The boss of British American Tobacco (BAT) has rejected calls from a top shareholder to relist in New York, stating that moving across the pond was “not a top priority” and a “very simplistic view.”
Speaking to the Times, Tadeu Marroco, who was appointed chief executive of the firm following the sudden departure of former CEO Jack Bowles in May, said it is “very simplistic to attribute the valuation gap to the place where we are listed”.
He added: “I note that there is an overall difference in terms of valuation between S&P 500, for example, and the FTSE 100, but it’s much more related to the sectors that are present in those indices and the weight of those sectors in the first place.”
Rajiv Jain, the founder of Florida-headquartered investment firm GQG Partners, had urged BAT to move its main listing from London, telling the Financial Times in March that the firm was an “orphan of Europe.”
“The core ownership base [of BAT] has disappeared. It makes no sense for them to remain there,” he said at the time.
But Marocco argued today that BAT – who own cigarette brands including Lucky Strike and Dunhill – had a “very well-established base of investors in the UK and we have American depositary receipts that you can transact in the US.”
He added: “There is no certainty that you can get into the index in the US, so you would be running the risk of being in limbo. So I would doubt very much that 75 per cent of shareholders would approve that [the move]. I have so many other things to do that wouldn’t be top of my priorities.”
It comes after a string of companies have picked listing in New York over London due to the potential for higher valuations and a deeper pool of investors.
Shortly before Jain’s comments in March, the Cambridge-located chip designer Arm shunned London in favour of listing in the big apple.
In April, building supplier CRH, announced it would swap its primary listing to New York, with the firm looking to tap into more “commercial, operational and acquisition opportunities”.