Transaction in Own Shares
- None.
- None.
Insights
Share buybacks are a significant corporate financial strategy, impacting a company's capital structure and shareholder value. In the described transaction, Shell plc has engaged in a substantial repurchase of its own shares, a move that often indicates a belief by company management that the shares are undervalued. The repurchase also reduces the number of outstanding shares, potentially increasing earnings per share (EPS) and return on equity (ROE) metrics.
When analyzing the financial implications of such buybacks, investors should consider the opportunity cost of the capital used for repurchasing shares versus potential investment in business growth or debt reduction. Additionally, the timing and price of the buyback are crucial, as buying at or near peak prices can be less beneficial to long-term shareholder value than repurchasing shares at lower prices.
The compliance with Chapter 12 of the Listing Rules and Article 5 of the Market Abuse Regulation 596/2014/EU (EU MAR), alongside UK adaptations post-Brexit, is crucial for maintaining market integrity and investor confidence. These regulations ensure transparency and prevent market manipulation associated with share buybacks. The detailed disclosure of trades by Goldman Sachs International on behalf of Shell plc underlines the adherence to these regulatory frameworks, which is a positive sign for stakeholders concerned with corporate governance.
Strategically, this buyback program may signal to the market Shell plc's confidence in its future financial performance. Investors often view share buybacks as a sign that a company's leadership believes the stock is undervalued. However, it's essential to assess the long-term strategy and capital allocation efficacy. If the buyback is financed through debt, the increased leverage could pose risks if the company's earnings do not grow as anticipated. Conversely, if the buyback is funded from cash reserves, it may reflect efficient capital management, assuming no better investment opportunities were available.
Transaction in Own Shares
December 21, 2023
• • • • • • • • • • • • • • • •
Shell plc (the 'Company') announces that on 21 December 2023 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 |
| 21/12/2023 | 1,025,000 | LSE | GBP | |||
| 21/12/2023 | 244,236 | Chi-X (CXE) | GBP | |||
| 21/12/2023 | 250,000 | BATS (BXE) | GBP | |||
| 21/12/2023 | 1,000,000 | XAMS | EUR | |||
| 21/12/2023 | 400,000 | CBOE DXE | EUR | |||
| 21/12/2023 | - | - | - | - | 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 2 November 2023.
In respect of this programme, Goldman Sachs International will make trading decisions in relation to the securities independently of the Company for a period from 2 November 2023 up to and including 26 January 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 Goldman Sachs International 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
What shares did Shell plc (SHEL) purchase on 21 December 2023?
At what price did Shell plc (SHEL) purchase the shares?
Who is managing Shell plc's (SHEL) share buy-back program?
What regulations is Shell plc (SHEL) complying with for the buy-back program?
