Transaction in Own Shares
- None.
- None.
Insights
Share buy-back programs, such as the one detailed for Shell plc, are a significant indicator of a company's financial health and strategy. The repurchase of shares can often signal to the market that the company believes its stock is undervalued. By reducing the number of outstanding shares, earnings per share (EPS) may increase, potentially leading to a higher stock price. However, the impact on the stock market can vary depending on the scale of the buy-back and the market's perception of the company's motives.
Investors and analysts closely monitor the volume weighted average price paid per share, as it provides insight into the company's valuation assessment. In this case, the price range for Shell's shares on the London Stock Exchange (LSE) indicates a controlled approach to the buy-back, likely designed to minimize market disruption. The involvement of a reputable financial institution like Goldman Sachs International to independently make trading decisions adds a layer of credibility to the program.
Long-term implications for stakeholders include the potential for increased shareholder value if the buy-back is part of a well-considered capital allocation strategy. However, it's important to assess whether the repurchased capital could have been more effectively used for reinvestment in growth opportunities or debt reduction.
From a legal perspective, the compliance with Chapter 12 of the Listing Rules and both the EU Market Abuse Regulation (EU MAR) and its UK counterpart (UK MAR) is crucial. These regulations are designed to prevent market manipulation and insider trading, ensuring that all market participants have access to the same information. The detailed disclosure provided by Shell plc, including the breakdown of individual trades made by Goldman Sachs International, adheres to the transparency requirements mandated by these regulations.
It's essential to understand that the legal framework surrounding share buy-backs is structured to protect investors and maintain market integrity. Any deviation from these rules could result in severe penalties for the company. The pre-set parameters and authorities granted by shareholders underscore the importance of corporate governance in executing such financial maneuvers.
Examining the market response to share buy-back announcements can offer insights into investor sentiment. Historically, markets tend to react positively to buy-backs as they often lead to a reduction in share supply, which can drive up the share price. However, it is also important to consider the broader market conditions and sector performance. For example, in the energy sector, where Shell operates, factors such as oil prices, regulatory changes and shifts towards renewable energy can significantly influence stock performance.
Furthermore, the timing and scale of the buy-back program can indicate management's confidence in the company's future earnings and cash flow stability. Analysts will compare the buy-back activity to industry norms and historical performance to gauge its potential impact on the market. In this case, the fact that Shell has engaged in a buy-back program might be interpreted as a positive signal, potentially leading to a re-rating of the stock by the market.
Transaction in Own Shares
January 17, 2024
• • • • • • • • • • • • • • • •
Shell plc (the 'Company') announces that on 17 January 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 |
| 17/01/2024 | 827,127 | LSE | GBP | |||
| 17/01/2024 | - | - | - | - | Chi-X (CXE) | GBP |
| 17/01/2024 | - | - | - | - | BATS (BXE) | GBP |
| 17/01/2024 | - | - | - | - | XAMS | EUR |
| 17/01/2024 | - | - | - | - | CBOE DXE | EUR |
| 17/01/2024 | - | - | - | - | 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 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
How many shares did Shell plc purchase on January 17, 2024?
Who is making trading decisions for Shell plc's share buy-back program?
In accordance with what regulations is Shell plc conducting the share buy-back program?
