Transaction in Own Shares
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Shell plc's recent announcement of share buybacks is a significant event that reflects the company's capital allocation strategy and its current financial health. Share buybacks are often executed when a company believes its shares are undervalued or when it wishes to return capital to shareholders in a tax-efficient manner. This action can lead to an increase in the earnings per share (EPS) ratio due to the reduced number of shares outstanding, potentially boosting investor sentiment and the stock price.
However, the impact of such buybacks on the company's stock market performance must be analyzed in the context of the broader market conditions and the company's operational performance. For instance, if the market perceives the buyback as a signal that the company lacks profitable investment opportunities, it could have a negative impact. Moreover, the use of cash for buybacks could be scrutinized if the company has significant debt or if it faces substantial investment requirements.
Examining the financial implications of Shell plc's share repurchase, the transaction involves a substantial volume of shares and a significant expenditure of capital. The repurchase is executed within the parameters of regulatory frameworks, such as the EU Market Abuse Regulation (MAR) and the UK equivalent post-Brexit, ensuring compliance and transparency.
Investors should note that the repurchase is being conducted by Goldman Sachs International independently of the company, which is a common practice to avoid conflicts of interest and to provide an arm's length transaction. This setup can reassure investors about the fairness of the buyback price.
The financial impact of the buyback will be reflected in Shell's balance sheet and liquidity ratios. A reduction in cash reserves or an increase in debt to finance the buyback could affect the company's financial flexibility. Conversely, the reduction in share count could improve return on equity (ROE) and other per-share metrics, making the stock more attractive to certain investors.
Shell plc's share repurchase program is conducted in strict adherence to regulatory requirements, including the EU Market Abuse Regulation and its UK counterpart, which governs the disclosure and execution of such transactions. The legal framework ensures that the repurchases are made in a manner that does not abuse the market and provides transparency to shareholders and the public.
The legal intricacies of conducting a share buyback program, especially in a post-Brexit environment, require careful navigation of both EU and UK regulations. Shell's compliance with these regulations, including the detailed reporting of trades made by Goldman Sachs International, is crucial for maintaining investor trust and avoiding potential legal repercussions.
Transaction in Own Shares
January 03, 2024
• • • • • • • • • • • • • • • •
Shell plc (the 'Company') announces that on 03 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 |
| 03/01/2024 | 1,583,000 | LSE | GBP | |||
| 03/01/2024 | 283,000 | Chi-X (CXE) | GBP | |||
| 03/01/2024 | 524,204 | BATS (BXE) | GBP | |||
| 03/01/2024 | - | - | - | - | XAMS | EUR |
| 03/01/2024 | - | - | - | - | CBOE DXE | EUR |
| 03/01/2024 | - | - | - | - | 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
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