News Column

Shell's Plan To Sell Stake In Woodside Petroleum Lacks Support

July 30, 2014

Tom McIvor

LONDON (Alliance News) - Royal Dutch Shell PLC's plans to sell a major stake in Australian oil and gas producer Woodside Petroleum Ltd for USD2.68 billion may be falling through after too few Woodside shareholders voted in favour of the plan.

On Thursday, ahead of its general meeting to vote on the deal, Woodside said preliminary votes showed that roughly 71.3% of votes cast so far were in favour of the deal and 28.7% against. For the deal to proceed, the resolution requires that a 75% majority of votes are cast in favour of the buy-back.

Woodside said that roughly 59% of those entitled to vote have already done so, but the final outcome will be decided on Friday.

Shell, which was Woodside's largest shareholder with a 23.1% stake in June, noted when it announced the planned sell-down to equity market investors that it would reduce its holding to below 5%.

As part of the deal, Woodside would buy-back 78.27 million of its shares from Shell's subsidiary, Shell Energy Holding Australia Ltd, at a price of USD34.24 per share, or AUD36.49 per share. The buy-back price per share has been split into a dividend component of USD26.29 per share and a capital component of USD7.95 per share, as agreed with the Australian Taxation Office in a private ruling.

Shell's world-wide LNG equity liquefaction capacity is 26.1 million tonnes per annum, or mtpa, with interests in eleven LNG plants. The company's transactions would reduce its equity liquefaction capacity to 24.9 mtpa after completion of the share buy-back.

Shell noted in June that Australia is set to underpin the company's next tranche of LNG growth with the Gorgon LNG project, where the company has a 25% stake, and the Shell-operated Prelude Floating LNG project in which the company holds a 67.5% stake.

At the time, Woodside's board of directors recommended that shareholders vote in favour of the selective buyback, subject to an independent expert's conclusion of a fair and reasonable deal to shareholders.

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Source: Alliance News

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