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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| BG Grp. | BG. | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 1,062.00 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 1,062.00 |
| Top Posts |
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Posted at 01/3/2016 20:55 by mr aboii WELCOME TO BG Group PLC _ ACTIVE INVESTORS CLUB (BG.) |
Posted at 02/2/2016 17:32 by jammyjambo I own BG Group shares and have to make the decision of what to do with them.I'm no pro investor which may explain my confusion. But why would I not just sell my shares now which are approx 1015 each rather than take the offer next week of 383p per share + [0.4454 * (RDSB - divs)? Or am I missing the point? Is the 383 on top of the share price on the day of the decision? Thanks, James |
Posted at 30/1/2016 12:52 by spob January 29, 2016Questions swirl around Royal Dutch Shell’s dividend Christopher Adams, Energy Editor FT With BG takeover, futures are pricing in a cut to the group’s payout amid oil price rout A totem sign stands illuminated outside a Royal Dutch Shell Plc gas station as light trails are left by moving traffic in this long exposure photograph in Romford, U.K., on Wednesday, Jan. 20, 2016. Royal Dutch Shell Plc, which is buying BG Group Plc in the industry's largest deal in a decade, expects fourth-quarter profit to drop at least 42 percent after the rout in crude prices deepened. Photographer: Chris Ratcliffe/Bloomberg& Investors mispriced at least one risk in the recent market turmoil: the likelihood that Royal Dutch Shell’s £36bn offer for UK oil and gas producer BG Group would collapse. Even as it became clear that shareholders in the two companies would vote for the deal, as they did this week despite the plunge in oil prices, anyone inclined to bank an attractive 5 per cent return could do so simply by buying BG shares. More ON THIS TOPIC Shell shareholders vote for BG takeover BG’s overseas assets shine amid oil gloom Lex Shell — the song remains the same Fast FT Shell set for 40% slide in Q4 profits IN OIL & GAS Chevron vows further steep cuts JKX board toppled by Russian investor Baker Hughes warns of oil industry slump Oil slump forces Repsol into deeper cuts Sign up now For months BG’s shares traded well below Shell’s offer value, and that discount has since narrowed. But that does not mean the takeover of BG, the biggest energy deal in more than a decade, is without risk for Shell. Far from it. The acquisition, due to be completed on February 15, will end nearly 20 years of independence for an asset-rich producer and nimble natural gas trader that was spun out of the old British Gas in 1997. Shell’s reserves will grow by 25 per cent to 17bn barrels of oil equivalent, including substantial deepwater crude output in Brazil and liquefied natural gas production in Australia. But it is taking on substantial capital spending commitments, including investment in BG’s asset portfolio, and thousands of employees. Issuing shares to fund its cash-and-paper bid will add to Shell’s dividend costs. All this just as the crude price has crashed to its lowest level in 12 years, hitting revenues and profits. There will be savings. Some 2,800 jobs will be lost as a result of the takeover, $30bn of assets will be sold, and capital spending at the combined group slashed. These steps are designed to shore up cash flow and keep Shell’s promise to shareholders to at least maintain last year’s dividend — of $1.88 per share — in 2016. The question is whether, and for how long, the Anglo-Dutch oil giant can sustain this payout. Oil majors’ shares have long been valued for their reliable income streams: Shell has not cut its dividend for many decades. But exchange-traded dividend futures are pricing in about a 17 per cent cut to Shell’s payout this year, and steeper reductions, of more than 40 per cent, for 2017 and 2018. Indeed, with Brent crude trading this week at just over $30 a barrel, 70 per cent below its 2014 peak, this was the most pertinent concern raised by BG’s army of small investors at a packed meeting in London on Thursday to approve the Shell takeover. Andrew Gould, BG chairman, said the board had paid “considerable attention” to the measures outlined to safeguard the dividend. In other words, Ben van Beurden, Shell’s chief executive, should be trusted to deliver. The problem with this, say critics, is that the bid for BG, announced in April, followed a quarter in which Brent had traded at about $55 a barrel. The assumption then was that the economics of the deal worked at prices nearer $90. Chart: Shell-BG deal spread In the weeks that followed, as crude fell, Shell sought to reassure by saying the deal also worked at $70. But Brent has since tumbled to half that level. Shell now says the deal works in the “mid-$60s̶ Yet, for all the risks to cash flow, analysts say Shell is well positioned to weather the storm. Irene Himona at Société Brazil is the big prize for Shell in BG deal Ben van Beurden, Chief Executive Officer of Royal Dutch Shell, addresses a press conference in central London on January 29, 2015, to release its fourth quarter results announcement and its fourth quarter interim dividend announcement for 2014. Energy group Royal Dutch Shell on Thursday announced an eight-percent drop in annual net profits owing to a slump in global oil prices and said it would accelerate spending cuts. AFP PHOTO / BEN STANSALL (Photo credit should read BEN STANSALL/AFP/Getty Images) Speculation that Royal Dutch Shell would buy BG Group has been doing the rounds of the oil industry for at least the past 20 years. On Wednesday, it became reality. The dividend cost would be about $15bn in 2017, if the payout is set at the same level earmarked for this year. Shell should all but close the $11bn gap with organic free cash flow through proceeds from asset sales, and it could further trim its capital spending budget. The group could also borrow more. True, Shell expects a one-notch cut to its investment grade credit rating once the BG deal is completed, because of weaker oil prices. But additional funding costs would be minimal, says Ms Himona. And in a $60 world Shell will be a “formidable powerhouse” of LNG and deepwater assets. “The difference between a supermajor and other oil companies is that a supermajor has a huge balance sheet, in this case a $400bn balance sheet which is highly rated,” she argues. Shell will “take the pain” long before it considers cutting the dividend, she adds. If there is to be a cut, as the market fears, that debate still looks some way off. As Chris Wheaton at Allianz Global Investors puts it: “Many other things will go wrong in this industry before we get to dividend sanctity.” Speaking to shareholders this week, Simon Henry, Shell’s chief financial officer, said this of future dividend prospects: “We have not made a statement about the dividend beyond 2016 other than there is no change to the dividend policy, which in simple terms is to grow in line with earnings and cash flow.” |
Posted at 18/1/2016 16:49 by mavis5 Zyzzyva -I have worked in the oil industry for 30 years, starting at Shell and later at BG (with 7 years at BP in the middle). Given their respective portfolios, amongst other things,I would argue that the deal makes great industrial sense for both companies. You refer to long term investors - long term is where the deal will unlock huge value for Shell (and hence why the Shell Board argue so strongly for it). |
Posted at 18/1/2016 11:45 by zyzzyva this was back in December when the oil price was 25% higherOriginally the deal looked like no-brainer. It would end the governance and scale problems for BG and give Shell access to its reserves, saving Europe’s largest oil company the huge capital costs of exploration in the Arctic, Canada and elsewhere. The economics looked good with the oil price at the $60-a-barrel level and forecasts it would rise back to $70 by the time the deal – which awaited overseas approvals – was done. That all turns out to be pie in the sky. The price of Brent crude has tanked and in Christmas Eve trading stood at $37.50, down 75 per cent on the price 18 months ago. Then there is the dividend. Shell says that the accretive value of the BG deal means it will at the very least be able to hold the pay-out despite the problems in the wholesale market. Given, however, that all the calculations are based on oil returning to $60-a-barrel this is not a very bankable pledge. The Shell-BG deal no longer makes economic, investor or industrial sense and should be rejected by long term investors. It is too important to let hedge funds and other latecomers on the share register decide. |
Posted at 15/1/2016 20:03 by zyzzyva then by early November when the oil price had fallen to around $50 they said -Royal Dutch Shell on Tuesday again sought to assuage investor concerns over its planned $70 billion takeover of BG Group as it announced plans for further synergies and cost cuts aimed at making the deal work with oil prices in the mid-$60s a barrel. |
Posted at 13/1/2016 21:27 by zyzzyva when do investors have to make their final decisions on what way to vote? are the EGMs on 26/27th |
Posted at 10/1/2016 12:09 by mavis5 Shell's £36billion offer for rival BG Group has received a boost after shareholder advisory group Glass Lewis is understood to have come out in favour ahead of the investors’ vote later this month.Glass Lewis is the leading adviser for US shareholders and nearly a third of Shell’s investors and a quarter of BG’s are US-based. The deal has also won the backing of the other leading shareholder advisory group ISS last week. Read more: |
Posted at 22/12/2015 09:09 by choktaw BG Group (+3.13%); It has been reported this morning that the Shell/ BG merger deal may collapse (AlphaValue says). Shell would only have to pay $800m to stop the deal as opposed to the merger price of $13bn. Given the price of oil is now half of where it was when the deal was struck last April, some investors are selling BG and buying Shell in order to play the bid collapse theory. |
Posted at 26/8/2015 22:34 by spob Funds bet on Shell deal as oil prices plungeArash Massoudi and Miles Johnson FT 24 August 2015 A global stock market sell-off and tumbling oil prices have increased fears that some of this year’s largest takeover deals are at risk of falling apart — including Royal Dutch Shell’s $70bn bid for UK rival BG Group. Over the past week, the gap between the agreed price of several takeovers and the market price of the target companies’ shares has widened, as funds that specialise in profiting from these situations have taken fright. More On this topic Shell wins go-ahead for Arctic drilling Shell cuts 6,500 jobs and capital spending Lex Royal Dutch Shell — the hard bit Shell eyes billions of savings on BG deal IN Oil & Gas Schlumberger to buy Cameron for $14.3bn Investors fear dividend cut by oil majors India’s LIC saves Indian Oil share sale Transocean skips dividends as losses rise The spread on Monday between the £13.50 cash-and-stock offer that Shell made for BG Group, and the price of BG’s shares in the market reached its highest level since the deal was first announced in April. Brokers and traders said that at one point the spread stood at 17 per cent, as oil prices hit their lowest level in more than six years, with Brent crude about $43 a barrel. Shares in BG Group fell 6.9 per cent to £9.31 on Monday, while Shell shares lost 6.3 per cent to £15.86. A widening of the deal spread does not necessarily mean a takeover is at immediate risk of collapsing, but is usually interpreted as a signal of declining confidence that the transaction will complete as planned. One broker said that bets on the outcome of Shell’s deal for BG represented the biggest trades being made by so-called event-driven hedge funds in Europe. He added that he had not seen as many questions being asked about a deal’s prospects since last year’s tie-up between US drugmaker AbbVie and UK rival Shire. That transaction collapsed unexpectedly when AbbVie walked away from the deal, causing large losses to arbitrage funds blindsided by the move. Another deal spread to reach its widest level on Monday was that between Halliburton’s $35bn offer for US oilfield services company Baker Hughes and the target group’s market value. This deal, which was agreed last November, is still awaiting regulatory clearance in the US. "This sort of environment tends to create opportunities to trade around dislocated spreads" - Alper Ince, managing director at Paamco Alper Ince, a managing director at Paamco, a California-based investor in hedge funds with $9.5bn of assets under management, said: “The energy space is probably bearing the brunt of this, while other large deal spreads in other sectors are showing less signs of stress so far.” He added that some hedge funds would seek to profit from the jitters surrounding takeover deals. “This sort of environment tends to create opportunities to trade around dislocated spreads,” Mr Ince said. Shell has tried to defend the price it is paying for BG Group, despite the continuing weakening of the oil price since the transaction was announced. Its executives said they had found more potential cost savings since the deal was first announced, and the chief financial officer told investors that the deal works even if the oil price does not rise beyond $70 a barrel in the coming years. Shell has also argued that an acquisition would immediately add to its cash flow and allow it to maintain its dividend. Additional reporting by Anjli Raval COMMENTS (20) FTpsuedo 5 hours ago What happens to the del logic if the oil price stays below $50 a barrel until 2020? ReportShare RecommendReply Phil_20686 1 day ago I always find it a bit odd that Shell is not simply buying shares in BG group in the open market. If BG group is far below the target price why not buy as much of the company as you can at a discount to your offer? ReportShare RecommendReply John Newquay 1 day ago Shell management have spent months defending this deal. How can they now say they are paying too much without losing face? ReportShare 4RecommendReply W_G 1 day ago When the price of oil collapses, some oil companies become relatively inexpensive because the economics of drilling with the risks attached really don't match up against purchasing discovered reserves. And actually, any oil company can be in play as it becomes harder to replace reserves when it becomes non-economic to drill. So where are Amoco, Arco, Enterprise, Getty or Mobil or Conoco and Phillips as stand-alone companies? It really has less to do with efficiencies but more to do with deep pockets and companies that have a fiduciary responsibility to their share holders to provide a return on investment. The former can buy and latter may sell. ReportShare 3RecommendReply Felix Drost 2 days ago Another possible significant Shell failure. After rushing into shale, Russia and Canadian tar sands, retreating from Nigeria for politically correct reasons and bumbling into potentially dangerous Alaskan waters, here, another risky maneuver is turning sour. Admittedly, Shell no longer is the rational engineering company boldly expanding into a world that rewards bold rationalism. What Shell fails to realize sufficiently is just how quickly the world is changing. Energy prices thanks to shale and its spinoff technologies will remain very low for the medium term at least. This was foreseeable but Shell did not foresee it. A company like Shell ought to translate low oil prices into palpable benefits for its downstream customers. Instead it's playing high stake games and falls short. ReportShare RecommendReply MalcolmHartney 1 day ago @Felix Drost aren't you being 'wise with hindsight'? The deal still makes sense if Shell is in it for the long term. ReportShare 1RecommendReply Felix Drost 1 day ago @MalcolmHartney @Felix Drost No, we've been discussing a long term depressed oil price for about a year here now in the comments section, guesstimating a long term price between $40 and $60. Shale reserves are huge and (nowadays) hyper competitive companies are rushing new technologies in order to extract every last penny's worth and prove their relevance. Oil is now at $38, that profoundly hurts shale production but shale cannot be killed, shale technologies now are very mature and continue to improve: the moment oil goes up, so will shale production and with it, the price point at which the method is profitable falls. Of course it would be hindsight to say that the deal is too expensive now if there was no previous track record, but there was. I've never said anything about stock prices because those are more closely related to bubbles in China than Shell's actual performance and outlook. I used to be a "fan" of Shell under Jeroen van der Veer, but these are different times and the bets are far riskier. Better understanding these bets and calling them professionally is what Shell needs to do. Considering all the failures I enumerated, Shell no longer has that capability. It is living in the past. ReportShare RecommendReply Guy_Bransford 2 days ago Shell buying BG now is like RBS buy ABN AMRO in March 2008. Why the hurry for Shell? Why not at the very least prorate their offer for market moves since the deal was announced? ReportShare 6RecommendReply John Clark 54 2 days ago @Guy_Bransford Shell's management 'prorating' their offer could be admitting they had made a mistake and losing the chance of managing the enlarged company. I suspect they would rather lose their shareholder's money than lose face. ReportShare 7RecommendReply taffer 2 days ago @John Clark 54 @Guy_Bransford how much exit fees would need to be paid to BG? ReportShare RecommendReply tinhatman 2 days ago @taffer @John Clark 54 @Guy_Bransford £750m reverse break fee payable for change of recommendation to Shell shareholders on the class 1 approval. ReportShare 1RecommendReply Be a Debaser 2 days ago @tinhatman @taffer @John Clark 54 @Guy_Bransford Interesting, only 1% break fee.... Is that market norm? Seems quite low to me considering the potential impact for BG. ReportShare RecommendReply MalcolmHartney 1 day ago @John Clark 54 @Guy_Bransford As a shareholder I would rather they went ahead. I don't think BG is as bad a deal as ABN AMRO was for RBS (and note that Santander bought some 'attractive' bits of ABN AMRO!). ReportShare RecommendReply Mr Passive 1 day ago She'll are paying 60% or so in shares so the deal price moves with the mkt. but I don't think She'll have quite factored in how low and for how long oil prices will stay low..... ReportShare RecommendReply The real greybeard 1 day ago @Mr Passive When you know how long the oil price will stay low, you will become a very rich man. ReportShare 1RecommendReply Mr Passive 1 day ago @The real greybeard @Mr Passive Bull mkts last about 7-10 years, bear mkts about 17 ReportShare RecommendReply JP 1 day ago @Mr Passive rubbish.. Markets fall about 3 times faster than they rise ... fear is so much strionger than greed... puts always more expensive than calls at the wings .. ReportShare RecommendReply Mr Passive 1 day ago @JP @Mr Passive in oil errrr fact. Go and look back at the very long term charts for how long the oil price stays down ReportShare RecommendReply JP 1 day ago @Mr Passive This deal perhaps isn't so much about oil... maybe on the face of it these are both 'oil' companies .. but once the deal is done ... this is an LNG powerhouse... these projects require so much capex that scale has to be an asset... Low prices will fix the oil price... just like high prices fixed themselves... ReportShare 3RecommendReply FTpsuedo 5 hours ago @JP @Mr Passive they could short BG stock, then walk away from the deal, maybe the profit would cover their break fee? Or isn't that legal? |
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