Transaction in Own Shares
- None.
- None.
Insights
Share buyback programs, such as the one recently executed by Shell plc, have a direct impact on the company's capital structure and consequently, on its stock performance. By reducing the number of shares available in the market, the company is likely to see an earnings per share (EPS) increase due to the fewer number of shares amongst which profits are distributed. This can result in a positive signal to investors, as it may indicate the company's confidence in its financial health and future performance.
Investors should observe the volume of shares repurchased and at what price range these transactions occurred. The purchase of 499,000 shares on the LSE at a volume weighted average price of £29.2001 and 476,000 shares on XAMS at €34.3812, may imply management's perspective that the stock is undervalued. It's also worth noting the currency exchange component as purchases were made in both GBP and EUR, which could have additional financial implications based on currency fluctuations.
From a financial standpoint, Shell's share repurchase executed through both on-market and off-market channels signifies a substantial cash outflow that could have alternatively been invested in the business or distributed as dividends. While this approach can create shareholder value in the short-term, the long-term impact largely depends on the price paid for these shares compared to the intrinsic value of the company.
It is important to consider the company's net debt position and the overall strategy to ensure that the buyback program aligns with long-term growth prospects and does not merely serve as a short-term stock price booster at the expense of future capital needs. The selected broker, Citigroup Global Markets Limited, operating independently from the company, provides an additional layer of scrutiny to the process, which can reassure stakeholders of the buyback's objectivity and compliance with market regulations.
The adherence to regulations such as the EU Market Abuse Regulation and the Financial Services Act is critical for maintaining investor confidence and ensuring the integrity of the financial markets. Shell's compliance with these regulations, as detailed in the announcement, is intended to prevent market manipulation and abuses. Observing the rigorous framework that encompasses the share buyback program, including the UK MAR and the EU MAR Delegated Regulation, is fundamental for stakeholders to understand the procedural legitimacy of the transaction.
Investors and regulators scrutinize the execution of such programs under the current regulatory environment, where transparency and fair market practices are of utmost importance. This is even more pertinent considering the Brexit context, which has led to the 'onshoring' of certain EU regulations to UK law, necessitating a keen understanding of any shifts in the regulatory landscape that might affect the execution of such financial activities.
Transaction in Own Shares
12 April, 2024
• • • • • • • • • • • • • • • •
Shell plc (the ‘Company’) announces that on 12 April 2024 it purchased the following number of Shares for cancellation.
Aggregated information on Shares purchased according to trading venue:
| Date of purchase | Number of Shares purchased | Highest price paid | Lowest price paid | Volume weighted average price paid per share | Venue | Currency |
| 12/04/2024 | 499,000 | LSE | GBP | |||
| 12/04/2024 | - | Chi-X (CXE) | GBP | |||
| 12/04/2024 | - | BATS (BXE) | GBP | |||
| 12/04/2024 | 476,000 | XAMS | EUR | |||
| 12/04/2024 | - | CBOE DXE | EUR | |||
| 12/04/2024 | - | TQEX | EUR |
These share purchases form part of the on- and off-market limbs of the Company's existing share buy-back programme previously announced on 1 February 2024.
In respect of this programme, Citigroup Global Markets Limited will make trading decisions in relation to the securities independently of the Company for a period from 1 February 2024 up to and including 26 April 2024.
The on-market limb will be effected within certain pre-set parameters and in accordance with the Company’s general authority to repurchase shares on-market. The off-market limb will be effected in accordance with the Company’s general authority to repurchase shares off-market pursuant to the off-market buyback contract approved by its shareholders and the pre-set parameters set out therein. The programme will be conducted in accordance with Chapter 12 of the Listing Rules and Article 5 of the Market Abuse Regulation 596/2014/EU dealing with buy-back programmes (“EU MAR”) and EU MAR as “onshored” into UK law from the end of the Brexit transition period (at 11:00 pm on 31 December 2020) through the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020), and as amended, supplemented, restated, novated, substituted or replaced by the Financial Services Act, 2021 and relevant statutory instruments (including, The Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310)), from time to time (“UK MAR”) and the Commission Delegated Regulation (EU) 2016/1052 (the “EU MAR Delegated Regulation”) and the EU MAR Delegated Regulation as “onshored” into UK law from the end of the Brexit transition period (at 11:00 pm on 31 December 2020) through the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020), and as amended, supplemented, restated, novated, substituted or replaced by the Financial Services Act, 2021 and relevant statutory instruments (including, The Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310)), from time to time.
In accordance with EU MAR and UK MAR, a breakdown of the individual trades made by Citigroup Global Markets Limited on behalf of the Company as a part of the buy-back programme is detailed below.
Enquiries
Media International: +44 (0) 207 934 5550
Media Americas: +1 832 337 4335
LEI number of Shell plc: 21380068P1DRHMJ8KU70
Classification: Acquisition or disposal of the issuer’s own shares
Attachment
FAQ
How many shares did Shell plc purchase for cancellation?
Who will make trading decisions for Shell plc's share buy-back program?
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When was the share buy-back program announced?
