Transaction in Own Shares
- None.
- None.
Insights
Shell plc's recent transaction involving the repurchase of shares for cancellation is a significant financial activity that can have various implications for the company's capital structure and shareholder value. Repurchasing shares can be a signal to the market that the company believes its stock is undervalued. It can also improve financial ratios such as earnings per share (EPS) by reducing the number of outstanding shares. This action is often viewed positively by investors as it can indicate confidence by management in the company's future prospects and a commitment to returning value to shareholders.
However, it is essential to consider the opportunity cost of such buybacks. The capital used for share repurchases is not being invested in growth opportunities or used for other potential value-creating initiatives. Furthermore, the timing and price of the buybacks should be scrutinized to assess whether the company is effectively deploying its capital. The involvement of Goldman Sachs International to independently make trading decisions may mitigate concerns about timing and price, as it suggests an arms-length approach to the transactions.
From a financial perspective, the impact of these transactions on the company's balance sheet and liquidity should also be monitored. The repurchase program's scale, financed either through existing cash reserves or debt, can affect the company's leverage and financial flexibility.
Share buyback programs are a common market practice, often used by companies to manage their share price and provide an additional return to investors. The scale of Shell plc's repurchase program, as indicated by the multi-venue transaction details, reflects a substantial investment back into the company. This move can be interpreted as a strategic effort to consolidate ownership and possibly stabilize or push the share price upward, assuming a reduction in supply may lead to an increase in share price, all else being equal.
The choice of venues, including LSE and various European exchanges, highlights the global nature of Shell's investor base and the importance of executing the buyback across different markets to ensure a broad impact. The detailed disclosure of the buyback aligns with regulatory requirements under EU MAR and UK MAR, aimed at ensuring transparency in financial markets. This transparency is crucial for maintaining investor trust and can be seen as a positive signal regarding the company's corporate governance practices.
The legal framework governing Shell plc's share buyback program is complex, involving both European Union and United Kingdom market abuse regulations. Post-Brexit, the UK has 'onshored' EU regulations, with amendments, to ensure that its legal framework remains robust and in line with international standards. Compliance with Chapter 12 of the Listing Rules, EU MAR, UK MAR and the EU MAR Delegated Regulation is mandatory for listed companies engaging in such activities.
Understanding these regulations is crucial for stakeholders, as non-compliance could lead to sanctions and loss of investor confidence. The company's adherence to these regulations, including the delegation of trading decisions to Goldman Sachs International, helps mitigate legal risk and ensures the buyback is conducted within the pre-set parameters approved by shareholders. The legalities of the buyback process, including the off-market and on-market limbs, are essential for ensuring that all transactions are fair and do not manipulate the market.
Transaction in Own Shares
January 08, 2024
• • • • • • • • • • • • • • • •
Shell plc (the 'Company') announces that on 08 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 |
| 08/01/2024 | 1,529,000 | LSE | GBP | |||
| 08/01/2024 | 254,084 | Chi-X (CXE) | GBP | |||
| 08/01/2024 | 1,150,000 | BATS (BXE) | GBP | |||
| 08/01/2024 | 1,600,000 | XAMS | EUR | |||
| 08/01/2024 | 200,000 | CBOE DXE | EUR | |||
| 08/01/2024 | - | - | - | - | 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 08 January 2024?
Who makes trading decisions for Shell plc's share buy-back program?
In compliance with which regulations is Shell plc's share buy-back program conducted?
