Ashtead to Move Primary Listing to US, Undermining London’s Stock Market

Ashtead Group Plans to Shift Primary Listing to the US, Delivering Another Blow to London’s Stock Market

Ashtead Group, a leading UK-based construction equipment rental company, has announced plans to move its primary stock market listing from London to the US. This decision, the latest in a series of high-profile departures, highlights the ongoing shift away from London as the main hub for internationally-focused businesses. With Ashtead generating the vast majority of its revenue in North America, the move to New York is seen as a natural step in the company’s long-term strategy.

Why Ashtead Is Moving Its Primary Listing to the US

In a statement released earlier this week, Ashtead Group explained that the US has become “the natural long-term listing venue” for the company. With over 90% of its revenue coming from North America and the company reporting in US dollars, the move reflects the growing importance of the US market in Ashtead’s business. The company, which rents construction equipment across the US and Canada, has long been more focused on the North American market than its UK base.

The announcement of the listing move follows a difficult period for Ashtead, which recently downgraded its full-year rental revenue forecast due to softer demand in the US commercial construction market. In addition, the company revealed plans for a buyback program of up to $1.5 billion over the next 18 months, aiming to return value to shareholders. However, the news sent Ashtead’s shares tumbling by as much as 9.8% in London on Tuesday.

London Loses Another Major Listing: Impact on UK Markets

Ashtead’s decision to move its primary listing is the latest in a series of high-profile companies that have turned their backs on London. In recent years, other major businesses such as CRH Plc and Flutter Entertainment Plc have opted to list in New York, citing a larger investor base and stronger market valuations in the US.

One of the most significant blows came last year when chipmaker Arm Holdings chose to list on the US stock market, a move that further diminished the appeal of London as a global financial hub for tech and international companies. Ashtead’s announcement will no doubt add to concerns that London’s capital markets are increasingly losing their luster, especially for companies with a strong North American focus.

Strategic Shifts: Ashtead’s Focus on North America

Ashtead’s decision to relocate its listing was not a sudden one. The company has been preparing shareholders for this shift since the summer. In September, Ashtead appointed an American, instead of a British national, as its new Chief Financial Officer, signaling its deepening ties with North America.

The company’s future prospects are closely tied to the US construction industry, which remains strong despite recent economic headwinds. With the majority of its employees and operations based in North America, Ashtead’s market strategy has increasingly been shaped by US conditions. This has made the decision to relocate its listing an expected step, aligning its corporate identity more closely with its main market.

The Case for US Listings: Why Companies Are Moving

Ashtead is not the only UK company to see the benefits of listing in the US. JPMorgan Chase & Co. recently published an analysis showing that UK companies that switch their primary listings to New York tend to experience improved market valuations. Firms like CRH and Ferguson Enterprises have seen their discount to US competitors narrow significantly after moving their listings to the US.

Additionally, activist investors have pushed for such changes. Hedge fund Third Point, led by investor Dan Loeb, has advocated for a number of large British companies to shift their listings to New York. The firm believes that a US listing would boost share prices and improve access to US investors, who are often willing to value companies more highly than their UK counterparts.

The Future of London’s Stock Market

Ashtead’s listing move could have broader implications for the UK stock market, which has seen a decline in major international listings in recent years. With more companies choosing to list in New York, London risks losing its position as a leading global financial center. The departure of large, internationally-focused companies could result in lower liquidity and less attractive valuations for investors.

While London remains an important financial hub, particularly for European-focused businesses, its ability to attract multinational corporations looking to access global capital markets may be under threat. As companies like Ashtead continue to align themselves with the US market, it’s clear that the UK stock market may face increasing competition from New York in the years ahead.

What’s Next for Ashtead and UK Markets?

Ashtead’s shift to a US listing is still subject to shareholder approval, with the company expected to put forward a formal resolution in the coming weeks. If approved, the process of moving its primary listing could take 12 to 18 months. For now, the company will continue to operate under its UK listing while making preparations for its eventual transition.

This move is unlikely to be the last, as more UK companies with significant operations in North America may follow suit. As the UK continues to grapple with its post-Brexit economic realities, the attractiveness of New York’s capital markets may become too great to ignore.