Posts on ‘June 28th, 2005’

MarketWatch.com: Stars aligning for Royal Dutch Shell

Tuesday 28 June 2005

Rising crude price, index reweighting giving a boost

By Steve Goldstein, MarketWatch

LONDON (MarketWatch) — For a company recovering from a scandal surrounding its overstatement of proven oil reserves, the stars could hardly be aligning better for Royal Dutch Shell.

Shell (RD: news, chart, profile) (SC: news, chart, profile) , like the entire energy category, is benefiting from record crude-oil prices that have now topped $60 a barrel.

And, assuming shareholder approval Tuesday of the merger of its Dutch-listed company, Royal Dutch Petroleum, which presently holds 60% of assets, with U.K.-listed Shell Trading and Transport, which holds 40%, it should get a lift from index funds as well as more active investors having to meet the company’s increased standing in the FTSE 100 index as well as other European indexes. read more

Financial Times: Much agonising over what to do

Tuesday 28 June 2005

The shareholder base of Royal Dutch and Shell Transport and Trading is so varied that investors inevitably disagree on whether the restructuring marks the end or the beginning of reform for the group, writes Sundeep Tucker.

At the height of the scandal last summer over the level of oil reserves it had booked, Jeroen van der Veer, the group’s lead executive, held a number of meetings with shareholders in the US, The Hague and the City of London. The discussions centred on investor demand for a structure that would foster accountability and transparency in decision-making. read more

Financial Times: Shell prepares for the next merger round

“The reserves debacle had seriously dented shareholder confidence”

Tuesday 28 June 2005

By Ian Bickerton, James Boxell, Thomas Catan and Henry Tricks

On the top floor of London’s towering Shell Centre, a cavernous boardroom looms over the Houses of Parliament, filled with high-backed chairs and rows of angled microphones. For decades, British and Dutch directors from two separate companies have held eight “conferences” a year, alternating between there and The Hague, to decide on the business of Royal Dutch/Shell Group. But if shareholders on Tuesday approve the most radical restructuring in its history, the London room will fall into disuse. Instead, board members will assemble each time in a gabled building, topped by a clock tower, in the vicinity of the Dutch parliament. read more

Financial Times: Shell merger poses new risk

Tuesday 28 June 2005

By Paul Betts

Royal Dutch/Shell is expected to approve on Tuesday a corporate revolution by merging its two separately quoted arms into a single company headquartered in the Netherlands with its primary listing in London.

This is likely to double the Anglo-Dutch major’s weighting in the FTSE 100 index. In so doing, it will concentrate further the index of the UK’s leading 100 companies around a handful of big caps, reflecting a growing European trend contrasting with Wall Street and Tokyo. read more

Financial Times: UK holdings of Shell far too low

Tuesday 28 June 2005

By Tony Tassell, Tom Catan, Ian Bickerton, James Boxell and Sundeep Tucker,

UK institutional shareholders still need to buy billions of pounds worth of shares in Shell to pump up their exposure to the oil major following its planned merger with Royal Dutch.

Holdings are far below what would be required to match the enlarged market weighting of a combined Royal Dutch Shell.

The merger has to be approved by Shell and Royal Dutch shareholders at their annual meetings today. It is widely seen as the potential trigger for one of the biggest shake-ups of the London market since Vodafone took over German rival Mannesmann in 2000. read more

The Times (UK): Record gas discovery in India could hit projects

June 28, 2005

By Carl Mortishead, International Business Editor

INDIA has claimed its biggest gas discovery, a deposit in the Bay of Bengal that could double the country’s gas production and bring into question major projects to import liquefied natural gas into the country.

Gujarat State Petroleum Corporation (GSPC), a state-owned enterprise, said that it had found 20 trillion cubic feet of gas in the Krishna Godavari Basin, an area offshore of Andhra Pradesh state in the southeast of the sub-continent. read more

Schaeffers Research, Ohio: Shareholders Set to OK Shell Unification (AP)

28 June 2005

By ANTHONY DEUTSCH Associated Press Writer

THE HAGUE, Netherlands

Shareholders are expected to approve the merger of the Anglo-Dutch parent companies of Royal Dutch/Shell on Tuesday, ending a century-old dual corporate structure at the world’s third largest oil producer.

Shell announced the plans along with its third quarter earnings on Oct. 28. The announcement came amid a scandal over the repeated downgrading of its strategic oil reserves, which form the backbone of its business. read more

Reuters: Shell investors set to ditch dual listed structure:nif

Tue Jun 28, 2005

By Tom Bergin, European Oil and Gas Correspondent

LONDON (Reuters) – Royal Dutch/Shell (SHEL.L: Quote, Profile, Research) (RD.AS: Quote, Profile, Research) shareholders are expected to end a century of history on Tuesday when they vote on scrapping the group’s dual-listed structure.

Shell hopes the unification of its Dutch and British parent companies will help streamline its management structure, whose complexity was blamed for a damaging reserves overbooking scandal last year. read more

BBC News: Shell investors to vote on merger: Shell is planning the biggest overhaul in its 100-year history

Tuesday 28 June 2005

Investors in Shell will be asked to vote on a plan to merge the Anglo-Dutch oil company’s two management boards, creating a firm worth £120bn ($219bn).

It is currently 40%-owned by Shell and 60%-owned by Royal Dutch Petroleum.

The move aims to simplify the chain of command and boost transparency after management was blamed for a crisis that saw Shell slash its reserves.

The merged firm would be called Royal Dutch Shell and its bigger size would allow it to better compete with rivals. read more

Financial Times: Lombard: Shell game that keeps investors guessing

Tuesday 28 June 2005

By Martin Dickson

Forget Suduko. The mind-boggling numbers game that is currently occupying fund managers is how to rearrange holdings of Royal Dutch and Shell following expected shareholder approval on Tuesday of the merger of the Dutch and British companies.

Effectively, unification will bring a £73bn colossus, in the shape of Royal Dutch, onto the top table of the FTSE 100. At a stroke, the oil sector will gain a weighting of about one fifth of the FTSE 100, roughly equal to banks, making the UK market even more defensive, concentrated and top heavy than it has been until now. read more

Financial Times: OBSERVER: Circular Shell

Tuesday 28 June 2005

ABN Amro has invested considerable energy down the years in its relationship with Royal Dutch/Shell, the oil and gas giant whose shareholders are today expected to vote to scrap nearly a century of dual-headed governance.

The Dutch bank is itself the product of a patchwork of mergers since the late 19th century, most recently the 1991 union of the Amro (Amsterdam-Rotterdam) Bank and ABN (Algemene Bank NL).

It was a banker from one of the forerunners of Amro bank that dreamed up Royal Dutch/Shell’s hydra-headed structure way back in 1907. When Shell’s Dutch supervisory board sought an adviser on the unwinding of the cumbersome governance model there was only one candidate . . ABN Amro read more

Financial Times: Lex live: Royal Dutch/Shell

Tuesday 28 June 2005

UK budgets under Gordon Brown’s tenure have shown that taxation and simplicity rarely go hand in hand. But the complexities produced by Royal Dutch/Shell’s unification give the chancellor a run for his money.

To avoid Shell shareholders having to pay Dutch withholding tax – and no doubt to appease British and Dutch interests – the company will retain two classes of shares. The A shares, representing Royal Dutch stock, currently trade at a 3.5 per cent discount to the B shares, representing Shell Transport & Trading. Is this discount justified? read more

Channel4 News: Shell investors vote for merger

Tuesday 28 June 2005

Source: ITN

Shareholders in the Shell oil firm have voted 99.75 per cent in favour of a plan to create a new holding company, Royal Dutch Shell.

Shell is currently 60 per cent owned by Royal Dutch Petroleum and 40 per cent by the Shell Transport and Trading. But the vote, plus that of shareholders in the Netherlands, means RDP and STT are to merge so that Shell has one parent.

Trading in Royal Dutch Shell shares is due to start on 20 July. With a market capitalisation of more than £100bn it could be be the world’s third-largest publicly traded oil firm. It will be headquartered in The Hague but have its primary stock market listing in London. read more

London Evening Standard: Shell and Royal Dutch merge

Robert Lea,

28 June 2005

STRONG share-buying in Shell is likely to continue for several days and weeks because of the unprecedented shake-up at the giant oil major, and despite fears from investors that the company could be on the verge of a rash acquisitions programme.

Shareholders in Shell Transport & Trading are in Docklands today at the company’s annual meeting, which will consign the last 100 years to the history books and rubber-stamp a full-scale merger with Royal Dutch, its sister company in Holland. read more

The Scotsman: Shell Accused of Hanging Shareholders ‘Out to Dry’

Tuesday 28 June 2005

By David Winning, PA City Staff

Shell shareholders today expressed anger at an £80 million tax bill that will follow the biggest overhaul in the oil giant’s 100 year history.

They accused the board of “hanging them out to dry” by devising a scheme to unify its UK and Dutch assets that leaves many facing large losses from capital gains tax.

Shell Transport, which has its headquarters in London, plans to merge with Netherlands-based Royal Dutch Petroleum next month as it strives to eliminate failings that led to its reserves crisis last year. read more

Bloomberg: Royal Dutch, Shell Shareholders Vote to Combine (Update3)

Tuesday 28 June 2005

June 28 (Bloomberg) — Royal Dutch/Shell Group shareholders voted to merge its holding companies in the Netherlands and Britain, ending a century-old separation that investors said damaged what was the world’s largest publicly traded oil company.

The votes at Royal Dutch Petroleum Co. near The Hague and Shell Transport & Trading Co. in London today will disband companies that since 1907 had operated as one with separate stock- market listings and boards of directors. Shell’s U.K. shares rose 3.2 percent, the biggest one-day gain since Feb. 1. read more

THE NEW YORK TIMES: Shareholders Approve Shell Unification

28 June 2005

By THE ASSOCIATED PRESS

Published: June 28, 2005

THE HAGUE, Netherlands (AP) — Shareholders overwhelmingly approved the unification of the Royal Dutch/Shell Group of Cos. on Tuesday, an attempt by the world’s third-largest oil producer to recover after a scandal over restated reserves.

Some 97.4 percent of shareholders in the Netherlands and 96.38 percent in London voted in favor of ending a century-old dual corporate structure at the Anglo-Dutch company.

”The opportunities for simplification and quicker decision making and clearer accountability are tremendous, and I think it’s going to make a huge difference,” said Malcolm Brinded, Shell’s executive director for exploration and production. read more

Financial Times: Campaigners vent fury at Shell board: 28 June 2005

Human rights campaigners on Tuesday urged Royal Dutch/Shell to improve its environmental policy, seizing the platform of the energy group’s Dutch annual meeting in Scheveningen to accuse it of “polluting communities and destroying lives”.

A string of campaigners expressed fury and frustration at what they claimed was the company’s failure to address the concerns of local communities.

“Our lives are being destroyed,” said one man, referring to oil spills and gas flaring in Africa’s Niger delta. read more

CityWire: Shell merger moves market

Tuesday 28 June 2005

By: Douglas Bence, Companies Correspondent

The most antiquated corporate structure in the world was dead and buried today as shareholders in Royal Dutch Shell and Shell Transport and Trading voted to merge.

For 98 years, both companies had their own shareholders and boards of directors, but attempted to trade as one unit. The antiquated structure became increasingly burdensome, inefficient, expensive and eventually disastrously counterproductive.

Seven years ago Shell was the world’s largest quoted company in the sector, but in terms of revenue and production, it has since fallen behind BP and Exxon. read more