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Shells proposed purchase of BG
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With the price of oil now down to well below half of what Shell management trying to justify it originally claimed justifed the price offered ($70 barrel) WITH all the synergies they think the 2 companies combined could make! BG shareholders stand to lose a lot if Shell Shareholders vote against this deal ..“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0
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I have instructed my nominee company to vote against it, though somehow I don't think my tiny Shell shareholding will have the board trembling in their boots.0
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I have instructed my nominee company to vote against it, though somehow I don't think my tiny Shell shareholding will have the board trembling in their boots.
Whatever the outcome, its still great to see shareholders making an effort to stop management acting only in their own interests. I wish there were more like you :T“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »Whatever the outcome, its still great to see shareholders making an effort to stop management acting only in their own interests. I wish there were more like you :T
Ok, you've shamed me into getting the paperwork from Shell back out of the recycling bin to add my meagre holding to the cause!0 -
According to FT article tonight it looks like its going to go through because many Shell shareholders are funds that also hold BG who stand to benefit, and because Shell are paying around $460million in fees and expenses to those who will benefit most of all, on top of what their internal legal and PR departments are spending. At least they aren't trying to tell us the deal works at todays oil price. The best excuse they can come up with is the price Shell Shareholders are paying for BG now could be justified if oil prices rise in the future. Seems to me like going to the filling station today, and they try to charge you £5 a litre because it might be that in 20 years time.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0
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Seems to me you are being a little short sighted on this.Glen_Clark wrote: »Seems to me like going to the filling station today, and they try to charge you £5 a litre because it might be that in 20 years time.
Shell could have waited but might that have led to a bidding war. They could scrap the offer, pay the penalties and then re-bid (would they be allowed to under the take over panel rules???). Again, no guarantee's a revised bid would be accepted or might be trumped by another organisation.
As with a lot in life, there are big unknowns.
They, them, those that pretend to know say that oil prices could be back up to $70 a barrel in 12 months time. If that happens then the TO would have been a very sensible action. Of course, 'they' could be wrong.
I'm a Shell holder and am ok with the deal. Shell is one company that I have just held for years, and years, and years. The TO offers a lot of future returns without incurring unknown exploration costs.
The benefits to BG holders is a (at present) better dividend policy. You makes your choice, you takes yer chance. You can always sell.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
With the falling oil price everyone else seems to be looking to sell oilfields, not buy more at 50% premium to market.- when the oil price was more than double what it is now.Shell could have waited but might that have led to a bidding war.
Shell share price fell as soon as the news was released, and fell more as it was digested.You can always sell.
The only people trying to defend this clearly overpriced deal I have heard are either;
Professionals sharing the half billion dollars Shell are paying in fees.
Shell Management looking to save face.
Those with shares in both companies, so don't mind how much Shell is overpaying“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Really?Glen_Clark wrote: »With the falling oil price everyone else seems to be looking to sell oilfields....
Pretty much the same that happens for every company (making an offer).Glen_Clark wrote: »Shell share price fell as soon as the news was released, and fell more as it was digested.
That's not quite true...ISS have come out advising acceptance of the offer.Glen_Clark wrote: »The only people trying to defend this clearly overpriced deal I have heard are either;
Professionals sharing the half billion dollars Shell are paying in fees.
Shell Management looking to save face.
Those with shares in both companies, so don't mind how much Shell is overpaying
Hindsight is a wonderful thing....I'm glad one of has got it.
Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
Really?
Pretty much the same that happens for every company (making an offer).
That's not quite true...ISS have come out advising acceptance of the offer.
Hindsight is a wonderful thing....I'm glad one of has got it.
How much of the $ half billion or from Shell's slush fund will ISS be trousering indirectly
The 50% premium for an opening offer is not hindsight. And considering the vast sums paid for Shell's Management 'expertise' and hands on experience, in my naeivity I thought they might have had some idea at the time where the oil price was heading.
I suppose the next concern will be Shell Management clinging on to the illusion this deal is paying off so they can maintain the dividend - leading to a rights issue and another celebration for the spivs paid to market and arrange it.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Having now read the details from Shell, and looked up last year's annual report from BG, I am more unsure than ever.
I think the long-term case stacks up, but not sure of what now looks like an overpriced deal. The details indicate benefits assuming an oil price above $50 but also that the combined group would be better able to withstand downturns in the oil price.
Apart from the high price on offer, Shell continue to suggest that they will maintain their dividend next year (in $ terms). Surely that has to be in doubt? Otherwise, at current share prices that would be an implied yield of over 9%!
They plan to use the reduction in costs under the combined group to fund a share buy back, reversing the dilution caused by the offer of shares to BG holders. Fair enough, but it might be better to use all available cash to do that now at current prices, rather than committing that cash to a high cost deal.
I know there are almost no similarities, but the drive to build a global giant, does remind me of RBS/ABN Amro!0
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