Companies that list on an additional Stock Exchange

If they do list on the London exchange is there share dilution to existing shareholders or because it is a new listing is it a new class or set of shares?

Neither. You just have the option to sell the shares at that other exchange. There will always be a certain price difference, but arbitrageurs tend to poll this difference towards 0.

The answer is not clear until you look at the prospectus for the LSE listing.

Cross-Listing of Shares or Depository Receipts?

Many stocks "listed" on international exchanges are not actually listed there; instead, depository receipts are listed. American or Global depository receipts (ADRs/GDRs) hold 1 (or sometimes another amount) of shares in a depository receipt and pass-through dividends, capital gains, splits, etc.

Consider Sony. Sony on the Tokyo Stock Exchange (6758) has ISIN JP3435000009. However, the ISIN for Sony on the New York Stock Exchange (SNE) is US8356993076. The difference in ISINs reveals these are different securities: you cannot buy on one exchange and exit your position on the other exchange. You might try going to Sony's website to get some clarity, but the fact that SNE is an ADR is not mentioned on Sony's website. A little more searching suggests that all other international listings of Sony are for the US ISIN -- the ADR.

Are there firms with true cross-listings? Years ago IBM cross-listed shares on the Deutsche Börse, however there was little volume in the cross-listed shares.

Dilution?

Will a true cross-listing or a depository receipt be dilutive? That depends on if the firm issues new shares to raise more capital or just puts some current shares outstanding into a trust for depository receipts. Given that the firm mentioned there is much more capital in the London market, I would guess that they are planning to issue new shares. That would be dilutive; however, if the new capital helps them invest and grow faster, the diluted shares may eventually be worth more.

How WIll Prices Relate?

Finally, how will the prices relate? That depends on dividend policy, voting rights, and how many shares are in a depository receipt (if not a true cross-listing). If the voting rights and dividends are the same, the prices should be roughly the same after converting currencies.

For an example, you can look at Unilever traded on the LSE (ULVR, ISIN= GB00B10RZP78) in GB pence versus on the Amsterdam Euronext exchange (UNA, ISIN=NL0000388619) traded in Euros. The two listings have the same dividends and voting rights and tend to be priced almost identically.