Euronext Fights to Keep Total's Listing Amid US Shift

Euronext confident in retaining TotalEnergies' listing amid US move consideration, highlighting Europe-US valuation and ESG dynamics.

By Mackenzie Crow

5/15, 10:10 EDT

Key Takeaway

  • Euronext is striving to keep TotalEnergies' primary listing in Paris, amid concerns over US market shifts for higher valuations.
  • TotalEnergies considers a New York listing to close valuation gaps with US peers, driven by a growing American investor base and European ESG pressures.
  • French President Macron opposes the move, highlighting tensions between US and European investment attitudes towards the oil and gas sector.

Euronext's Efforts to Retain TotalEnergies

Euronext NV, the pan-European stock exchange, is actively working to prevent TotalEnergies SE from moving its primary stock listing to New York. Euronext CEO Stephane Boujnah expressed confidence in finding technical solutions to keep TotalEnergies listed in Europe, where he believes liquidity for the company is significantly better. This initiative underscores the challenges European exchanges face in retaining companies that seek higher valuations in the US market. TotalEnergies' consideration of a listing move highlights the broader trend of European firms contemplating shifts to capitalize on the deeper pool of US investors.

TotalEnergies' Valuation Concerns

TotalEnergies is exploring the possibility of transferring its primary listing from Paris to New York, aiming to bridge the valuation gap with its US counterparts. CEO Patrick Pouyanne emphasized the business rationale behind this consideration, noting the company's growing US shareholder base and the desire to offer them shares directly, rather than through American Depositary Receipts (ADRs). Pouyanne pointed out the diminishing European shareholder base, attributing it partly to the intense focus on environmental, social, and governance (ESG) metrics in Europe, which has impacted the company's valuation relative to the US market.

Macron's Disapproval and ESG Dynamics

French President Emmanuel Macron has expressed his disapproval of TotalEnergies' potential move, highlighting the national concern over such a significant decision by one of France's largest companies. The debate around TotalEnergies' listing location also brings to light the differing attitudes towards the oil and gas sector between US and European investors. European investors, influenced by stricter ESG criteria, show less appetite for investing in the sector, a sentiment echoed by actions from institutions like BNP Paribas SA, which has increased its restrictions on fossil-fuel clients. This contrast in investor attitudes underscores the valuation challenges faced by companies like TotalEnergies in Europe.

Management Quotes

  • Stephane Boujnah, CEO of Euronext:

    "I’m confident that we’ll find technical solutions for Total to remain listed where the liquidity is."

  • Patrick Pouyanne, CEO of TotalEnergies:

    "There is no emotion — it’s a question of business... What we observe is that we have more and more US shareholders. Today we can only offer them ADR and we want to offer them shares." "We have less European shareholders, including French shareholders, probably because of all the debate about ESG, etcetera... And then you see quite a difference of valuation between the US market and the European market. So it’s a fiduciary duty for the board to study" the proposal.

  • Emmanuel Macron, President of France:

    "[I would be] not at all [happy]" with such a decision by TotalEnergies.

  • Wael Sawan, CEO of Shell Plc:

    "Simply relisting is not going to address" the fundamental valuation of the company.