Transaction in Own Shares
- None.
- None.
Insights
Shell plc's announcement of a share buyback on the 9th of February 2024 indicates a strategic move to manage capital allocation and shareholder value. The repurchase of 850,000 shares on the London Stock Exchange (LSE) and 810,000 shares on Euronext Amsterdam (XAMS) at the detailed prices suggests a significant capital outlay. This could signal the company's confidence in its financial stability and future performance. Share buybacks often lead to an increase in earnings per share (EPS) by reducing the number of shares outstanding, potentially leading to a positive market reaction.
However, the impact on the stock price can vary depending on the market's perception of the buyback's motive. If the market perceives the buyback as a signal that the company's stock is undervalued, this could result in a positive stock price reaction. Conversely, if investors believe the buyback is a means to artificially inflate stock prices without underlying business growth, the reaction could be neutral or negative.
Additionally, the use of both on-market and off-market limbs of the share buyback program, managed independently by Citigroup Global Markets Limited, is a common practice to avoid conflicts of interest and to adhere to market abuse regulations. The adherence to EU MAR and UK MAR regulations ensures transparency and compliance, maintaining investor confidence in the process.
The share buyback by Shell plc is part of a broader trend where large corporations use excess cash to repurchase shares, often seen as an alternative to dividends for returning value to shareholders. This can be particularly attractive to investors who prefer capital gains over dividends for tax reasons. The repurchase also reduces the liquidity of the stock, which can lead to increased volatility.
Market reaction to such news typically depends on the context in which the buyback is announced. If the company is perceived to be performing well with strong cash flows, the buyback may be seen as a positive reinforcement of its growth prospects. In contrast, if the company is facing operational challenges, the buyback might be viewed as a short-term measure to prop up the share price.
It is also worth noting that the buyback was conducted across different trading venues and currencies, reflecting the global nature of Shell's investor base and the company's need to manage its capital structure across different markets. This kind of activity can sometimes provide arbitrage opportunities for investors, depending on the timing and price discrepancies between markets.
Shell plc's compliance with the Market Abuse Regulation (MAR) and the detailed disclosure of its share buyback transactions demonstrate the company's commitment to legal and regulatory adherence. MAR is designed to prevent market manipulation and insider trading and companies must strictly follow these rules when conducting buybacks.
The company's disclosure includes specific details such as the highest and lowest price paid and the volume-weighted average price, which are critical for investor transparency. The legal framework within which Shell operates has become more complex post-Brexit, with the need to comply with both EU MAR and UK MAR. The company's ability to navigate these regulatory waters without incident is a positive sign of its robust legal and compliance functions.
Investors should take comfort in the fact that the share buyback program is being executed within a well-defined legal structure, reducing the risk of regulatory penalties that could negatively affect shareholder value.
Transaction in Own Shares
9 February, 2024
• • • • • • • • • • • • • • • •
Shell plc (the ‘Company’) announces that on 9 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 |
| 09/02/2024 | 850,000 | LSE | GBP | |||
| 09/02/2024 | - | Chi-X (CXE) | GBP | |||
| 09/02/2024 | - | BATS (BXE) | GBP | |||
| 09/02/2024 | 810,000 | XAMS | EUR | |||
| 09/02/2024 | - | CBOE DXE | EUR | |||
| 09/02/2024 | - | 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 9 February 2024?
At what price range did Shell plc purchase shares on the London Stock Exchange on 9 February 2024?
Who is managing Shell plc's share buy-back program?
Until when will Shell plc's share buy-back program run?
In compliance with which regulations is Shell plc conducting its share buy-back program?
