Flutter Entertainment To Exit London Stock Exchange, Move Listing to New York

Flutter Entertainment shareholders have approved the company’s move to New York with an overwhelming 98% vote in favor of abandoning its London listing. The gambling giant, which owns brands such as Paddy Power and Betfair, joins a growing exodus of major companies departing the London Stock Exchange for more attractive valuations in the United States. Evidently, the strategic shift reflects Flutter Entertainment’s business transformation, as the US market now generates nearly 40% of its revenues. This marks a dramatic increase from just 10% five years ago.

Flutter Entertainment Completes London Stock Exchange Exit

Flutter Entertainment made its New York Stock Exchange debut on January 29, trading under the ticker symbol ‘FLUT’. Initially, the company maintained its premium listing on the London Stock Exchange with the existing ticker ‘FLTR’ as part of the FTSE 100 index.

Shareholders passed a special resolution at the Annual General Meeting on May 1, 2024, transferring Flutter Entertainment’s listing category from a Premium Listing to a Standard Listing on the LSE. Following this decision, the company’s primary listing shifted to the NYSE.

The transition involved multiple stages across different exchanges. January 23 marked the last trading day for Flutter Entertainment’s shares on Euronext Dublin before suspension and eventual delisting. As part of a regulatory simplification process, the company exited the Eurostoxx index by December 18.

Flutter Entertainment announced a review of its secondary London listing, with a potential decision to cancel it entirely expected by the end of June. The company plans to report full-year results under US GAAP standards on March 26, reflecting its increasing orientation towards the American investor base.

Despite the listing changes, Flutter Entertainment reported strong financial performance with first-quarter revenues rising 17% to £3.41 billion. Adjusted earnings before interest, tax, depreciation and amortization increased 2% to £501.12 million.

Why Did Flutter Entertainment Leave London for New York?

Executive compensation emerged as a prominent factor driving Flutter Entertainment’s departure from London. Average US CEOs earned approximately £84.66 million compared to £8.02 million for their UK counterparts among the top 10 companies by market capitalisation in 2022. The disparity becomes particularly pronounced in equity components, with US long-term incentive plan payouts averaging £77.99 million versus £3.57 million in the UK.

Market performance differences substantially influenced this pay gap. The S&P 500 gained 51% over five years while the FTSE 100 declined 0.71% during the same period. Performance-linked equity awards naturally carry greater value in outperforming markets, which partly explains compensation variations between the two jurisdictions.

Cultural attitudes toward executive pay differ markedly across the Atlantic. UK investors, politicians and media outlets display greater hostility to significant executive payouts than their US counterparts. This scrutiny translates into pressure on remuneration committees to moderate packages. UK shareholders regularly subject compensation resolutions to dissenting votes due to quantum concerns.

Flutter Entertainment shares characteristics with other London departures like CRH and Ferguson, as the US represents its biggest market. CEO-to-employee pay ratios reflect these cultural divides, averaging 293:1 for comparable US companies versus 122:1 for FTSE top 10 firms.

How Does This Reflect Broader Exodus from London Stock Exchange?

The London Stock Exchange recorded 88 companies delisting or transferring their primary listing during the year, with merely 18 new listings taking their place. This net outflow represents the largest exodus since 2009, while new listings reached their lowest level in 15 years. Altogether, over £79.42 billion worth of UK-listed firms have shifted or plan to shift their primary listings to New York.

The fintech company Wise announced plans to move its main listing to the US, marking another setback for London’s technology sector. The £27 billion construction rental company Ashtead Group plans to shift its primary listing to New York. Pharmaceutical firm Indivior canceled its secondary London listing after moving its primary listing to the US. What is more, metal investment company Cobalt Holdings scrapped its expected £182.66 million London listing.

IPO activity collapsed to £196.95 million raised from new listings, the lowest total in 35 years. By comparison, the US raised nearly £42.88 billion over the same period. London dropped to 23rd place globally for IPO activity, overtaken by markets including Mexico and Singapore.

The LSE’s aggregate market capitalisation declined to £2.38 trillion in February 2024 from £3.41 trillion in 2007, whereas the US market grew three-fold to £42.09 trillion.