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Shell reducing stake in Woodside Petroleum
Posted on Tuesday, 14 November 2017 06:47
Shell Energy Holdings Australia (SEHAL), a subsidiary of Royal Dutch Shell (Shell), is selling part of its stake in Australia’s largest publicly traded oil and gas firm Woodside Petroleum for an estimated AUD 2.23 billion (USD 1.70 billion).
The 71.60 million shares divested signify 64.0 per cent of the vendor’s stake, or 8.5 per cent of the target’s issued capital.
For a minimum of 90 days after completion, expected on 14th November 2017, SEHAL has agreed not to unload any more of its holding in Woodside, which will stand at 4.8 per cent.
The bid offer of AUD 31.10 per share represents a discount of 4.5 per cent from the closing price of AUD 32.57 on 10th November 2017, the last trading day prior to the announcement.
Shell’s finance chief, Jessica Uhl, said: “This sale is another step towards the completion of our three-year USD 30.00 billion divestment programme, which is an important part of our strategy to reshape Shell”.
She added that the deal would strengthen the oil and gas giant’s finances, with proceeds being used to reduce net debt.
For the nine months ending 30th September 2017, Shell posted net income of USD 9.17 billion, more than tripling the USD 3.03 billion recorded for the same period last year.
The Netherlands-headquartered conglomerate attempted a takeover of Woodside, which claims to be a global leader in upstream oil and gas, in 2001 but the Australian government blocked the effort on national interest grounds.
The seller has been sporadically cutting its interests in the Perth-based business since 2010, when it sold 10.0 per cent for approximately AUD 3.31 billion.
In a statement to Reuters, Woodside, which was founded in 1954, said the companies will continue to work together as joint venture partners on two Australian liquefied natural gas projects.
It reported profit after tax of USD 552.00 million for the six months ending 30th June 2017, a 40.5 per cent increase from the USD 393.00 million posted for the corresponding timeframe in 2016.
© Zephus Ltd