TIDMFERG
RNS Number : 6501J
Ferguson PLC
15 April 2020
15 April 2020
Ferguson PLC
ASSESSMENT OF Listing Structure - Outcome of Shareholder
Consultation
On 3 September 2019, the Board of Ferguson (the "Board")
announced its intention, subject to shareholder approval, to
demerge its UK operations ("Wolseley UK demerger"). This will
result in Ferguson being wholly focused on its attractive North
American markets. At the same time, the Board also announced that
it was considering the most appropriate listing structure for the
Group going forward.
Following the Wolseley UK demerger , Ferguson's Group CEO and
operational management team will be based in North America and the
entirety of the Company's revenues and profits will be generated
there. In addition, there is a comparable set of peer companies
listed in the US, some of whom compete directly with Ferguson.
These companies have a large domestic investor following and are
typically covered by a broad range of North American equity
analysts. The Board believes that it would now be beneficial to
have direct access to this substantial incremental pool of capital
in the US and, together with its advisers has been carefully
assessing a range of options and the associated costs and benefits
of amending its listing structure to allow access to these
benefits.
The Board believes that the US is the natural long-term listing
location for Ferguson. It also recognizes the importance of acting
in the interests of shareholders as a whole, many of whom, in the
event of a primary US listing, have mandates that may restrict
continued long-term ownership.
On 4 February 2020 the Board announced that it was commencing a
further consultation with institutional shareholders on two
potential listing structures which would aim to facilitate greater
North American domestic investment in Ferguson. Option 1 is to seek
shareholder approval for an additional listing of ordinary shares
in the US and Option 2 is to seek shareholder approval for a
primary listing in the US. The key elements of each option were
summarized in the 4 February announcement and are repeated in the
appendix to this announcement.
Since the 4 February announcement, the Board has consulted with
institutional shareholders representing approximately 70% of
Ferguson's issued share capital and, together with its advisers,
has carefully considered the feedback received. While there is
majority shareholder support for Option 2, the Board does not
believe that the required 75% majority in favor of Option 2 would
be achieved.
Consequently, and taking into account the feedback received, the
Board has decided to seek shareholder approval for Option 1 to
enable an additional listing of ordinary shares in the US. Once the
general uncertainty arising from the COVID-19 pandemic has
lessened, a General Meeting will be convened to consider the
necessary shareholder resolution and if approved, the additional
listing is expected to take effect in the first half of calendar
year 2021.
The Board expects that the additional US listing will facilitate
increased ownership by domestic US funds and, accordingly, the
Company will also initiate additional full-time investor relations
support in the region. In addition, the Executive team will also
undertake extensive additional investor marketing in the US. These
actions will enhance understanding and awareness of Ferguson's
business amongst this significant incremental pool of capital.
Within 12 months of the effective date of the additional US
listing, or earlier should there be a meaningful change in
ownership, the Board intends to put forward a further shareholder
resolution to relocate the Company's primary listing to the US. The
Board believes that this two-step process to transition to a full
US primary listing would provide an appropriate period during which
some shareholders that have mandates which may restrict their
long-term ownership of the Company could sell their holdings in an
orderly manner.
Geoff Drabble, Ferguson plc's Chairman commented:
"This is a complex topic for our shareholders and during the
consultation process we have engaged widely and listened carefully
to their views. The Board is recommending an additional listing of
ordinary shares on a major US exchange which we will put to a vote
once current market uncertainty has lessened and if approved is
expected to take effect in the first half of calendar 2021. We
believe that ultimately achieving a US primary listing remains the
right outcome for our business as a domestic US value added
distributor. Consequently, after a period of transition, the Board
intends to hold a further shareholder vote to change the primary
listing to the US. We believe this process presents the most
orderly and equitable path to achieving this aim."
This announcement contains inside information.
For further information please contact
Ferguson plc
Geoff Drabble, Chairman Tel: +44 (0) 1189 273800
Mark Fearon, Director of Corporate Communications
and IR Mobile: +44 (0) 7711 875070
Media Enquiries
Mike Ward, Head of Corporate Communications Mobile: +44 (0) 7894 417060
Nina Coad, David Litterick (Brunswick) Tel: +44 (0) 20 7404 5959
Notes to editors:
1. Ferguson plc is a value added distributor of plumbing and
heating products to professional contractors principally operating
in North America and the UK. Revenue for the year ended 31 July
2019 was $21.8 billion and ongoing trading profit was $1.6 billion.
Ferguson plc is listed on the London Stock Exchange (LSE: FERG) and
is in the FTSE 100 index of listed companies. For more information,
please visit www.fergusonplc.com or follow us on Twitter
https://twitter.com/Ferguson_plc .
2. Legal disclaimer
Certain information included in this announcement is
forward-looking and involves known and unknown risks, assumptions
and uncertainties that could cause actual results or outcomes to
differ from those expressed or implied in any forward-looking
statement. There forward-looking statements are based on the
Company's current belief and expectations about future events and
cover all matters which are not historical facts and include,
without limitation, projections relating to results of operations
and financial conditions and the Company's plans and objectives for
future operations, including, without limitation, discussions of
expected future revenues, financing plans, prospects, growth,
strategies, expected expenditures and divestments, risks associated
with changes in economic conditions, the strength of the plumbing
and heating market in North America and Europe, fluctuations in
product prices and changes in exchange and interest rates.
Forward-looking statements are sometimes identified by the use of
forward-looking terminology, including terms such as "believes",
"estimates", "continues", "anticipates", "expects", "forecasts",
"intends", "plans", "projects", "goal", "target", "aim", "may",
"will", "would", "could" or "should" or, in each case, their
negative or other variations thereon or comparable terminology.
Forward-looking statements are not guarantees of future performance
and actual events or results may differ materially from any
estimates or forecasts indicated, expressed or implied in such
forward looking statements. All forward-looking statements in this
announcement are based upon information known to the Company on the
date of this announcement. Accordingly, no assurance can be given
that any particular expectation will be met and readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as at the date of this announcement.
Additionally, forward-looking statements regarding past trends or
activities should not be taken as a representation that such trends
or activities will continue in the future. Other than in accordance
with applicable law, (including under the UK Listing Rules, the
Prospectus Rules, the Disclosure Guidance and the Transparency
Rules of the Financial Conduct Authority), the Company undertakes
no obligation to update publicly or revise any forward-looking
statement, whether as a result of new information, change in events
or otherwise. Nothing in this announcement shall exclude any
liability under applicable laws that cannot be excluded in
accordance with such laws.
APPIX
Option 1 - Seek shareholder approval for an additional listing
of ordinary shares in the US
If this option were to be pursued:
-- Ferguson would seek an additional listing of its shares on a
major US stock exchange whilst maintaining its existing premium
listing on the London Stock Exchange ("additional US listing").
-- This option is not expected to lead to any change in
Ferguson's existing membership of the FTSE 100 index, though it
would not achieve inclusion in a US index.
-- Ferguson's current American Depository Receipt ("ADR") program would be cancelled.
-- An additional US listing would require shareholder consent
with a majority of 75% of votes cast in favor of a resolution to
amend Ferguson's current articles of association to facilitate
settlement of its shares in the UK and in the US.
-- This does not preclude a subsequent move to a primary listing
in the US (Option 2 below) but it would remain the case that the
Group's existing London premium listing could not be cancelled
without a further and separate shareholder vote (requiring a 75%
majority of votes cast).
-- An additional US listing is not expected to lead to any
material change in Ferguson's existing high standards of governance
and corporate responsibility.
-- An additional listing requires Sarbanes Oxley compliance.
Option 2 - Seek shareholder approval for a primary listing in
the US
If this option were to be pursued:
-- Ferguson would seek a change of primary listing of Ferguson's
ordinary shares to a major US stock exchange.
-- To become eligible for inclusion in major stock indices in
the US, the Group would need to change its premium listing in
London to a standard listing and consequently Ferguson would no
longer be eligible for inclusion in the FTSE 100 index. In this
scenario, it is likely that there would be a period of time between
the Group ceasing to be eligible for FTSE 100 indexation and
becoming eligible for inclusion in major US stock indices.
-- Ferguson's current ADR program would be cancelled.
-- This option would require shareholder consent with a 75%
majority of votes cast in favor of Ferguson amending its articles
of association and changing its premium listing in the UK to a
standard listing.
-- Under a primary US listing it is likely that Ferguson would
move to US standards of governance and corporate responsibility in
line with domestic peers.
-- A primary US listing requires Sarbanes Oxley and US GAAP compliance.
-ends-
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END
MSCZZGMDLDMGGZM
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