Shell Share Discussion Threads

[waldron] 30/11/2015 20:53

BG's shares are at smallest discount to Shell's offer price
Takeover received Australia antitrust approval this month



BG Group Plc’s discount to Royal Dutch Shell Plc’s takeover offer is the narrowest since the transaction was announced in April as the likelihood increases that the biggest oil deal of the decade will go through.

BG shares were 7.8 percent lower Monday than the price implied by Shell’s offer to buy the company, about half the discount reached in August. Shell has received approvals for three of the five preconditions to the acquisition, including one this month from Australia’s antitrust authority, meaning the window for some investors to cash in on the discount is starting to close, according to William Hares, a London-based oil analyst with Bloomberg Intelligence.

“There is less risk for non-completion as time progresses,” Hares said. “The spread has more than halved over the last 2 months, suggesting a narrowing window of opportunity for arbitrage-focused investors.”

Shell’s biggest acquisition has gone through highs and lows as crude prices slumped below $45 a barrel from near $60 when it was announced. The discount of BG’s shares to the offer price was as much as 12 percent earlier this month as some investors asked if Shell was paying too much. The company’s Chief Executive Officer Ben Van Beurden has defended the deal, saying the assets it gets from Australia to Brazil will bring long-term benefit, help cut costs and add to cash flow at any oil price.

BG shares traded at 1,042.50 pence Monday, 7.8 percent below the price implied by Shell’s offer, meaning an investor who purchases BG’s shares now can still make a gain if the deal is completed. The discount had surged to over 15 percent on Aug. 26. Shell in April offered to pay 0.4454 of its B shares and 383 pence in cash for each BG share, implying an offer price of 1,131.27 pence.

Shell expects the deal to close early next year, the company said Oct. 30, when it announced an additional $1 billion of savings in operating costs from buying BG. The Australian Competition and Consumer Commission approved the acquisition on Nov. 19 despite concerns it could reduce natural-gas supply to local customers and boost prices. The takeover, which has already won regulatory approvals from the U.S., the European Union and Brazil, still requires clearance from China’s antitrust regulators.

The outlook for the acquisition got a boost in October after BG raised its oil and natural gas production forecast for this year to between 680,000 and 700,000 barrels of oil equivalent a day. In July, it had forecast production to be at the upper end of a 650,000 to 690,000 range.


Before it's here, it's on the Bloomberg Terminal.

[84stewart] 30/11/2015 08:07

A re-negotiation is a non starter BG is @ the price before bid shell 20-25% lower not a great deal for BG @ these levels

[nigelpm] 29/11/2015 19:44

Sounds like your money should be on BG. Effectively a cheaper way into shell

[chairman20] 29/11/2015 18:09

Everything I read implies that the BG deal is
strategically vital for Shell.

It may be a battle but my money (literally) is on Shell

[grupo] 29/11/2015 13:09

cheers careful




By Ashley Armstrong, and Ben Marlow

8:00PM GMT 28 Nov 2015

Comments10 Comments

Chinese and Australian regulators are expected to give their blessing to Shell’s £55bn mega takeover of BG before Christmas, leaving the future of the deal resting squarely in shareholders’ hands.

The tie-up, which will create Britain’s biggest public company, has been under mounting scrutiny in recent weeks as the City questions whether Shell can justify pushing ahead, with oil prices remaining so suppressed.

However, the takeover will advance a major step towards completion in the coming weeks with the two sides anticipating clearance from China’s Mofcom regulator after the deal was passed into the final phase of its review process.

It is understood that Shell’s chief executive, Ben van Beurden, has recently had direct meetings with the president of China’s ministry of commerce, Gao Hucheng, a rare occurrence in the typically opaque process.

Shell boss Ben van Beurden Photo: AFP

Mr van Beurden has criss-crossed the globe since announcing the deal in April, including travelling to meet regulators in Brazil and Trinidad, where BG has large gas facilities. The takeover will enable Shell to fulfil Mr van Beurden’s ambitious growth targets and leapfrog its top US rival ExxonMobil to become the largest liquefied natural gas (LNG) producer in the world.

There were initial concerns about the level of Mofcom’s scrutiny, with BG set to become the biggest supplier of LNG to China once it is in Shell’s hands. However, sources claim that Shell has already put remedy proposals to Mofcom.

China was originally said to be viewing the deal as an opportunity to renegotiate its long-term gas supply, billion-dollar contracts between Shell and the country’s energy champions, China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (Cnooc) and Sinopec, which could have strained the rationale for the takeover.

However, Cnooc and CNPC have already pledged their broad support in return for continued co-operation with Shell on projects around the world.

Competition lawyers say Mofcom has a history of demanding remedies that often favour China in return for approving a deal. In 2013, it agreed to wave through Glencore’s acquisition of Xstrata on the basis that its Peruvian Las Bambas copper mine was sold to a Chinese buyer.

The authority has become a nightmare for dealmakers, as they are given little visibility about how the regulator reaches its decisions, while staff shortages often mean that reviews can become drawn out affairs, even when there are limited competition concerns.

However, with the guidance of an army of advisers, Shell has rattled through competition clearances quicker than many anticipated, winning approval from the US, European Commission and Brazil’s beefed up CADE regulator.

It has also been given the green light from one of two Australian regulators after the Australian Competition and Consumer Commission (ACCC) said it was unconvinced by concerns raised by big local gas users.

The Australian Foreign Investment Review Board (FIRB), which applies a national interest test, still has to rule, but sources close to the deal said they anticipated clearance by the end of the year.

Approval from China and Australia paves the way for investors to vote on the deal. It needs 50.1pc of Shell investors and 75pc of BG’s shareholders to vote in favour.

Questions have been raised about the growing gulf between the price of BG shares and Shell’s cash and stock offer, while some market sources have argued that the low oil price could force Shell to renegotiate the deal and reduce its bid.

However, is understood Shell is determined to press ahead, particularly as this is the fourth time it has looked seriously at a takeover of BG since 2001.

Shell has met four of its top US investors, including Fidelity and Franklin, in the past few weeks in an effort to soothe any jitters. Shell is confident that shareholders will vote it through because 18 of its top 20 fund managers also hold BG shares.

Shell said: “We are working positively with Mofcom and are hopeful of a positive decision, but it is up to them to decide and we expect they will carry out a thorough and professional review.”

source. sundaytelegraph

[careful] 29/11/2015 11:29

Headlines in todays Sunday Telegraph that the BG. deal is about to be given the green light from both China and Australia by Christmas.
This follows recent high level meetings between Shells CEO and top Chinese officials.

[eaaxs06] 26/11/2015 17:48

Let's hope HSBC are right.

[la forge] 26/11/2015 16:55

Royal Dutch Shell Plc (LON:RDSB) received a GBX 1,960 ($29.65) target price from equities researchers at HSBC in a research note issued to investors on Thursday, Analyst Ratings Network.com reports. The firm currently has a a “buy” rating on the stock. HSBC’s target price suggests a potential upside of 17.61% from the stock’s previous close.

[whiskeyinthejar] 26/11/2015 15:03

Clean technology actually means gas in a lot of contexts.

It's coal that's being shown the door.

And maybe it's renewable energy that's being too optimistic. They say wave power has enough energy to power the world five times over. Sounds great doesn't it! But Aquamarine Power went bust this week because it can't find investors who believe the technology will ever be viable.

No way of knowing the future really, just place your bets.

[my retirement fund] 26/11/2015 13:44

should add Shell are already proving a track record for this, what with several billion dollar writeoffs in recent years including recent Alaskan/polar projects.

Why break the trend, hence BG the next one?

[losos] 23/11/2015 12:07

nw99 - It's easy for the media scriblers to write about what a company like Shell should (or should not do) they can't loose whatever the company decides to do because years from now no one will remember what they wrote but everyone will still be interested in the company one way or another (i.e to buy or to sell ha ha)

[nw99] 23/11/2015 07:50

Good time to buy then

[enturner] 19/11/2015 13:10

Try this one:hTTp://www.cnbc.com/2015/11/17/why-oil-can-only-go-lower-from-here-gartman.html

[eaaxs06] 19/11/2015 12:49

If only trading was as simple as looking at a few charts, we'd all be millionaires.

[topdoc] 18/11/2015 23:57

Australia clears deal

[fangorn2] 16/11/2015 18:08

@Shaggie,

Yep concur with that conclusion for them selling their BP/Shell stakes down.

[shaggies_view] 16/11/2015 17:41

Telegraph article relating to QF selling BG and RDSB is the wrong in my opinion - nothing to do with merger but everything to do with QF being short in their budget. Sovereign funds have been selling big time .....

Shaggy

[novision] 16/11/2015 15:06

grupo I think you missed the "l" off the end :-)