BAT Moving Listing Would be ‘Distraction’

BAT CEO Tadeu Marroco dismissed the idea of moving the company’s listing to New York from London, stating that it “would create a lot of distraction internally,” according to the Financial Times. Marroco also noted that he wasn’t sure “the benefit would be as evident as some suggest.”        

In 2023, Rajiv Jain, chair and chief investment officer of U.S. investment group GQG Partners, which at its peak owned 4 percent of BAT stock, urged BAT to switch its primary listing to the U.S. Jain argued that Philip Morris International, which GQG Partners also owns a stake in, trades at a much higher earnings multiple.     

GQG Partners sold out of BAT in July 2023 due to BAT’s refusal to move its listing.

Marroco said in regards to the possibility of moving the company’s listing, “I don’t think that in this period of time, we should be focused on this.” He noted that he has “many other things” he needs to do and that “There is nothing to suggest that … it’s a no-brainer to go to the U.S.”

While Marroco acknowledged that London’s capital markets are struggling to attract and retain listings, he noted that there are advantages to staying in the U.K.

“If you have a shareholding of a U.K. [listed company] and you are located outside, you don’t pay withholding tax on your dividends, which is different from the U.S.,” he said.

“Hopefully, we can see that in 10 years’ time, we don’t have this type of discussion. Today, there’s a lot of emotion that relates to it because of the frustration of some that are leaving.”

BAT recently announced a sale of part of its stake in ITC to restart BAT’s share buyback program. “What’s most important for me is that having restarted the buyback, this should be a consistent feature in terms of our capital allocation,” said Marroco.

“We have a massive business in the U.S. that we can use to sell [new products],” he said. BAT’s U.S. cigarette sales have fallen, driven by consumers switching to cheaper brands and cigarette alternatives such as heated-tobacco products. By 2035, BAT aims to have 50 percent revenue from alternative products.