Smurfit Kappa is moving its Irish exchange listing to a secondary one as it upgrades its UK listing to a premium one, paving the way for its entry to the FTSE indices.
The next review date for entry to the FTSE listings is the end of May. Smurfit’s changes to its listings are expected to become effective from April 25th.
The company will still maintain its Irish listing, saying it was committed to the market. It will also allow euro investors to continue investing in the firm. To gain entry to the FTSE indices, Smurfit requires UK classification. If it achieves this, it will be subject to liquidity tests before being admitted to the indices.
Davy analyst Barry Dixon said there was no guarantee that the company would gain entry to the FTSE series, but the premium listing was an important step towards that goal.
It would also open up new markets for the company’s stock, he said, noting that it would lead to index buying.
“The longer-term issue of whether a premium listing in the UK will result in a narrowing of the valuation gap between SKG and its UK-listed peers remains to be seen,” he wrote in a note. “We believe that regardless of the listing, the valuation gap is not justified and should close.”
