A move to a US listing may not be the quick fix investors are hoping for; business fundamentals may have more to do with valuation disparity than geography
News that British American Tobacco is under pressure from at least one leading shareholder to join the drift of companies abandoning their UK listings for the US is enough to give officials at the London Stock Exchange a coughing fit. The loss of BAT would be a body blow for the capital’s market, depriving it of an $80bn FTSE 100 index stalwart — albeit one in a sunset industry beset with legal and regulatory overhangs rather than a racy technology leader like Arm.
The argument in favour is straightforward: London-headquartered BAT is an increasingly US-centric business. The share of revenue from its biggest single market rose to 45.7% last year, from 21.3% in 2017. The company’s Europe & North Africa segment, which includes the UK, accounted for 22.9%, down from 31.2% five years ago. A more appropriate name at this stage might be American British Tobacco. Neglected by its home country investors, B...
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