2nd UPDATE: Allianz To Delist From NYSE,Some Europe Exchanges
22 September 2009 - 11:26PM
Dow Jones News
Allianz SE (AZ), Europe's largest primary insurer by gross
premium income, Tuesday said it would delist from the New York
Stock Exchange (NYX) and other European stock exchanges in a move
to reduce reporting complexities.
The U.S. delisting will affect its American Depositary Shares
and 8.375% undated-subordinated callable bonds for which the last
trading day will likely be around Oct. 23, Allianz said.
Subsequently, it will also delist ordinary shares on the London,
Milan, Paris and Swiss stock exchanges to focus on the Frankfurt
Xetra trading platform as the market with the highest liquidity for
trading Allianz shares.
Allianz, which had been listed in the U.S. since Nov. 3, 2000,
said the decision won't affect its strategy nor its geographic
presence in markets but that it is an adjustment to international
stock-trading practices.
"Allianz adjusts to international trading practices and by doing
so reduces the complexity of its presence in the capital markets,"
Chief Financial Officer Paul Achleitner said. "The vast majority of
international investors already uses our listing in Frankfurt to
buy and sell Allianz shares."
The delisting on all exchanges will save a "midsize single-digit
million euros amount annually," an Allianz spokesman said.
Allianz noted that in recent years, trading of Allianz shares on
non-German stock exchanges accounted on average for significantly
less than 5% of the total trading of Allianz shares, despite the
fact that about 70% of Allianz shares are held by investors outside
of Germany.
The delistings are likely an efficiency-boosting measure as they
will reduce reporting requirements, said Merck Finck analyst Konrad
Becker, who rates the share at buy.
Allianz said it plans to maintain its American Depositary
Receipt program on a so-called "Level I" basis in order to enable
investors to trade ADSs in the U.S. over-the-counter market.
Level 1 shares can only be traded on the OTC market and the
company has minimal reporting requirements with the U.S. Securities
and Exchange Commission. For instance, it isn't required to issue
quarterly or annual reports in compliance with U.S. GAAP. However,
the company must have a security listed on one or more stock
exchange in a foreign jurisdiction and must publish its annual
report in English on its Web site to that country's standards.
The fact that less than 5% of shares was traded outside Xetra
despite the majority of foreign shareholders signals that the U.S.
listing likely didn't meet expectations such as broadening the
shareholder base, raising attention for the share and using the
share as acquisition currency, analyst Becker said. He said the
figures prove that the broader shareholder base can be reached
without a U.S. listing.
"Apparently, international investors don't mind that they have
to get on Xetra for trading the share," Becker said.
He said the decision will concentrate liquidity and raise the
trading volume on Xetra, but said the impact would be limited.
The decision doesn't mean that Allianz will exit from the U.S.
market nor that it will abandon plans to grow there, but it could
encourage other players to rethink their U.S. listing, Becker
said.
Allianz is joining the ranks of a number of European companies
that have delisted their shares from NYSE over the past two years.
These include German utility E.ON AG (EOAN.XE), chemicals and
pharmaceuticals giants Bayer AG (BAY.XE) and BASF SE (BAS.XE),
British Airways PLC (BAY.LN) and Danone SA (BN.FR), which all
delisted in 2007, citing reduced complexity, reporting requirements
and costs. Bayer said it expected to save EUR15 million
annually.
Most recently, semiconductor producer Infineon Technologies AG
(IFX.XE) announced that it would drop its U.S. listing, which
became effective April 24.
However, a number of large players such as Siemens AG (SI) and
Daimler AG (DAI) said a withdrawal from NYSE wasn't in the
works.
"A U.S. delisting is not an issue for us because the listing
gives us better access to the U.S. capital market," a spokesman for
premium car manufacturer Daimler AG said.
"We continuously monitor the benefit of our foreign listing. A
withdrawal from NYSE isn't currently on the agenda," a Siemens
spokesman said. Siemens shares are listed on NYSE, London and in
Switzerland, in addition to German exchanges, he said.
Company Web site: www.allianz.com
-By Ulrike Dauer, Dow Jones Newswires; +49 69 29725 500;
ulrike.dauer@dowjones.com
(Doug Cameron in Chicago and Vladimir Guevarra in London
contributed to this article.)