Royal & SunAlliance may be about to hit the acquisition trail after revealing it has plans to upgrade its share listing on the New York Stock Exchange, says an analyst.
David Hudson at HSBC believes a higher status US share listing would make it easier for RSA to launch future takeover bids.
It would also provide investors with greater choice on whether to invest in RSA shares quoted in the US or UK.
Hudson said: “If RSA is able to broaden its shareholder base, it could increase its access to further capital for possible acquisitions.”
He added that RSA may be seeking to expand in the US where it has a multitude of business interests and achieved a major acquisition last year.
By seeking a higher share listing in the US, RSA would be following hard on the heels of another UK insurance giant, Prudential, which successfully achieved a listing for its shares on the NYSE in June.
A spokesman for the Pru said the listing would help it broaden its shareholder base and increase its access to capital funds for possible expansion.
RSA corporate spokeswoman, Karen Donohue, said the insurer hoped to increase the liquidity of its US shareholder-base by swapping its level-one NYSE listing for a higher level-two rating in October.
Prices for level-two shares are updated repeatedly during share-dealing hours compared to only twice a day for level-one shares.
“The reason for seeking a higher status share listing would be to enlarge our present shareholder base to reflect our worldwide interests,” said Donohue.
However, she refuted suggestions that this would increase its level of stock market capitalisation.
