Smurfit to switch to London listing

Paper and packaging group Smurfit Kappa is to switch its primary share listing from Dublin to London next month in a move aimed at expanding its investor base and gaining access to the FTSE index.

The move will see the London Stock Exchange become the main trading platform for the company’s shares, with Dublin acting as a secondary marketplace and one for euro-denominated investors.

Smurfit Kappa has had a primary listing in Dublin and a secondary London listing since floating in 2007. Last month, the group switched trading currency for its shares in London from euro to sterling, also in a bid to make it easier for future admission to the UK series of FTSE indices.

To achieve this, a company needs to obtain UK nationality status from the FTSE.

As well as noting the FTSE element, Smurfit Kappa said yesterday that the move will expose it and increase its attractiveness to a wider potential investor base and enhance the liquidity of its shares. Europe and the Americas account for 77.1% and 22.9% of group revenue.

“While there is no guarantee that Smurfit Kappa will gain entry into the FTSE series, it is looking increasingly likely after [yesterday’s] announcement,” said Barry Dixon of Davy Stockbrokers.

“The longer-term issue of whether a premium listing in the UK will result in a narrowing of the valuation gap between Smurfit Kappa and its UK-listed peers remains to be seen. We believe that regardless of the listing, the valuation gap is not justified and should close.”

Smurfit Kappa’s shares rose over 1.4% yesterday.