Shell to sell 10pc stake in Woodside for $3.35b
Tuesday, 9 November 2010
LONDON, Nov 8 (Bloomberg): Royal Dutch Shell Plc, Europe's largest oil company, is selling a 10 per cent stake in Woodside Petroleum Ltd. for $3.35 billion, freeing up funds to support a six-fold increase in its Australian natural gas production.
Shell is selling 78.34 million shares in Australia's second-largest oil and gas producer at A$42.23 a share, retaining 24.27 per cent of Woodside, The Hague-based company said in a statement today. UBS AG is arranging the transaction, which is priced at an 8.6 per cent discount to Perth-based Woodside's Sydney close of A$45.86.
Shell Chief Executive Officer Peter Voser is selling as much as $8 billion in assets this year and next, cutting 7,000 jobs and reducing the less profitable refinery business. Today's sale announcement prompted speculation that Woodside may become an acquisition target.
"Given that Shell has the intent to sell down, they may not stand in the way of a Woodside takeover," said Jason Teh, who helps manage A$3 billion ($3 billion) at Investors Mutual Ltd. in Sydney, which holds Woodside shares. "It looks like Shell is selling out from what they consider something more mature to help it develop something more fledgling."
Woodside may be an acquisition target for BHP Billiton Ltd. after its $40 billion offer for Potash Corp. of Saskatchewan Inc. was blocked by Canada, UBS analysts said last week.
BHP spokeswoman Amanda Buckley declined to comment on Shell's sale of a Woodside stake. Roger Martin, Woodside's Perth-based spokesman, couldn't immediately be reached by phone or e-mail to comment.
Shell aims to spend as much as $50 billion in Australia over the next decade, more than in any other region, as the company shifts to producing natural gas instead of oil. Shell and PetroChina Co. in August completed a A$3.5 billion purchase of Arrow Energy Ltd. to develop a liquefied natural gas venture in Queensland fed by fuel extracted from coal seams.
Shell is selling 78.34 million shares in Australia's second-largest oil and gas producer at A$42.23 a share, retaining 24.27 per cent of Woodside, The Hague-based company said in a statement today. UBS AG is arranging the transaction, which is priced at an 8.6 per cent discount to Perth-based Woodside's Sydney close of A$45.86.
Shell Chief Executive Officer Peter Voser is selling as much as $8 billion in assets this year and next, cutting 7,000 jobs and reducing the less profitable refinery business. Today's sale announcement prompted speculation that Woodside may become an acquisition target.
"Given that Shell has the intent to sell down, they may not stand in the way of a Woodside takeover," said Jason Teh, who helps manage A$3 billion ($3 billion) at Investors Mutual Ltd. in Sydney, which holds Woodside shares. "It looks like Shell is selling out from what they consider something more mature to help it develop something more fledgling."
Woodside may be an acquisition target for BHP Billiton Ltd. after its $40 billion offer for Potash Corp. of Saskatchewan Inc. was blocked by Canada, UBS analysts said last week.
BHP spokeswoman Amanda Buckley declined to comment on Shell's sale of a Woodside stake. Roger Martin, Woodside's Perth-based spokesman, couldn't immediately be reached by phone or e-mail to comment.
Shell aims to spend as much as $50 billion in Australia over the next decade, more than in any other region, as the company shifts to producing natural gas instead of oil. Shell and PetroChina Co. in August completed a A$3.5 billion purchase of Arrow Energy Ltd. to develop a liquefied natural gas venture in Queensland fed by fuel extracted from coal seams.