Transaction in Own Shares
- None.
- None.
Insights
Shell plc's announcement of a share buyback on 5 February 2024 represents a significant financial move, reflecting the company's capital allocation strategy. Share buybacks are a common method for companies to return value to shareholders, as they can potentially increase earnings per share (EPS) by reducing the number of shares outstanding. This can lead to a higher stock price if the market perceives the action as a signal of confidence in the company's future prospects.
From a financial perspective, the key factors to evaluate include the size of the buyback, the prices paid and the impact on the company's balance sheet. In this case, Shell plc has repurchased a substantial number of shares, indicating a strong cash position and a commitment to delivering shareholder value. However, investors should consider the opportunity cost of such buybacks, as funds used for this purpose are not being invested in business growth or other potential value-creating initiatives.
It's also important to note that buybacks can be seen as a tax-efficient alternative to dividends, as they allow shareholders to defer capital gains taxes until they sell their shares. The impact on the stock market is typically positive in the short term, as buybacks can provide support for the share price, but the long-term effects depend on the company's ongoing performance and use of its cash reserves.
The buyback program conducted by Shell plc, as detailed in the announcement, is executed in compliance with both EU and UK market abuse regulations, reflecting the company's adherence to legal and regulatory standards post-Brexit. The dual-listing of the buyback across different currencies (GBP and EUR) and venues (LSE, Chi-X, BATS, XAMS, CBOE DXE, TQEX) demonstrates the complexity of executing such programs in today's fragmented trading environment.
Investors often view share buyback announcements as a positive market signal, indicating that the company believes its shares are undervalued. The specific mention of Citigroup Global Markets Limited making independent trading decisions could reassure investors about the objectivity of the buyback process, potentially reducing concerns about market manipulation.
For market participants, understanding the intricacies of such buyback programs and their execution is crucial. The announcement provides transparency regarding the trading venues, volumes and prices, which can be useful for analysts tracking trading patterns and liquidity implications in the market. The breakdown of individual trades also allows for a detailed assessment of the buyback's market impact.
The legal framework surrounding Shell plc's share buyback is complex, involving both the EU Market Abuse Regulation (MAR) and its UK counterpart following Brexit. The company's adherence to these regulations is critical to ensure compliance and avoid potential legal repercussions. The detailed disclosure of the buyback aligns with the transparency requirements mandated by these regulations, which aim to prevent market abuse and ensure fair trading practices.
The involvement of Citigroup Global Markets Limited, operating within pre-set parameters and making independent trading decisions, is a critical aspect to ensure the integrity of the buyback program. This setup minimizes potential conflicts of interest and aligns with best practices in corporate governance.
Stakeholders should be aware of the legal nuances of cross-border transactions, especially in the post-Brexit landscape where companies must navigate both UK and EU regulatory environments. The compliance with the EU MAR Delegated Regulation and its UK equivalent underscores the importance of regulatory diligence in the execution of share buybacks, which has implications for investor confidence and the company's reputation.
Transaction in Own Shares
5 February, 2024
• • • • • • • • • • • • • • • •
Shell plc (the ‘Company’) announces that on 5 February 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 |
| 05/02/2024 | 950,000 | LSE | GBP | |||
| 05/02/2024 | - | Chi-X (CXE) | GBP | |||
| 05/02/2024 | - | BATS (BXE) | GBP | |||
| 05/02/2024 | 961,000 | XAMS | EUR | |||
| 05/02/2024 | - | CBOE DXE | EUR | |||
| 05/02/2024 | - | 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 February 2024?
Who will make trading decisions in relation to the securities independently of the Company for the share buy-back program?
What regulations will the share buy-back program be conducted in accordance with?
What is the LEI number of Shell plc?
