Transaction in Own Shares
- None.
- None.
Insights
Share buyback programs are a strategic financial maneuver used by companies to repurchase their own shares from the marketplace. This action can indicate the management's belief that the shares are undervalued and it is a method to return value to shareholders as it can potentially increase earnings per share and improve financial ratios. In the case of Shell plc, the purchase of 1,165,000 shares on the London Stock Exchange (LSE) and 1,050,000 shares on the Euronext Amsterdam (XAMS) signifies a substantial investment back into the company.
From a financial perspective, the volume-weighted average price paid per share provides insight into the average price the company has paid during the trading day, which can be compared against historical trading prices to evaluate the timing and pricing strategy of the buyback. The involvement of Citigroup Global Markets Limited as an independent trader in this process ensures that the buyback is executed within the set parameters, aligning with regulatory compliance and mitigating potential conflicts of interest.
It's important to note that while buybacks can be a positive signal, they do reduce the company's cash reserves, which could have been used for other opportunities such as investments in growth or paying down debt. Therefore, the impact on the company's financial flexibility must be evaluated.
Shell's share buyback announcement can have various implications for the stock market and investor sentiment. Historically, share buybacks have been associated with immediate positive reactions in the stock market as they often result in an increase in the share price due to the reduction in supply and the signal that the company may be undervalued. However, the long-term effect on the stock price is contingent on the underlying financial health and future performance of the company.
Investors and analysts will closely monitor the company's future earnings reports and operational performance to assess whether the buyback was a prudent use of capital. Moreover, the market will also consider the broader economic context, including oil prices, energy demand and geopolitical factors, which are particularly relevant to Shell's business operations.
Furthermore, the transparency of trade breakdowns as per EU MAR and UK MAR regulations provides additional confidence in market operations, ensuring that all stakeholders have access to the details of the transactions, which supports the integrity of the financial markets.
The legal framework surrounding share buybacks is complex and is governed by both the Market Abuse Regulation (MAR) in the EU and its UK equivalent post-Brexit. The compliance with these regulations, as detailed in Shell's announcement, is crucial to ensure that the company's buyback program is conducted lawfully. The adherence to Chapter 12 of the Listing Rules, Article 5 of the EU MAR and the corresponding UK regulations demonstrates Shell's commitment to regulatory compliance.
Shell's disclosure of the delegated authority to Citigroup Global Markets Limited to make trading decisions independently of the company is also significant. This delegation is a common practice to avoid conflicts of interest and to adhere to the principle of an arm's length transaction. It is crucial for maintaining investor confidence in the fairness and legality of the buyback process.
Understanding these legal intricacies is important for stakeholders, as non-compliance with these regulations can lead to significant legal repercussions, including fines and reputational damage. Thus, Shell's meticulous approach to legal compliance in its buyback program is a critical aspect of the transaction.
Transaction in Own Shares
5 March, 2024
• • • • • • • • • • • • • • • •
Shell plc (the ‘Company’) announces that on 5 March 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 |
| 05/03/2024 | 1,165,000 | LSE | GBP | |||
| 05/03/2024 | - | Chi-X (CXE) | GBP | |||
| 05/03/2024 | - | BATS (BXE) | GBP | |||
| 05/03/2024 | 1,050,000 | XAMS | EUR | |||
| 05/03/2024 | - | CBOE DXE | EUR | |||
| 05/03/2024 | - | 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 on 5th March 2024?
What is the highest price paid per share by Shell plc on 5th March 2024?
Which company will make trading decisions independently for Shell plc's share buy-back program?
Until when will Citigroup Global Markets Limited handle trading decisions for Shell plc?
In which currency did Shell plc purchase 1,050,000 shares on 5th March 2024?
What regulations does Shell plc's buy-back program comply with?
