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BG investor sells £100m of shares

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By Ben Martin, and Ben Marlow: 20 Dec 2015

One of the biggest investors in BG Group has sold almost £100m of shares in the oil and gas business in the past week, raising questions about its view of the company’s £55bn takeover by Royal Dutch Shell.

Investment giant Capital Group offloaded stock worth approximately £76.4m on Thursday and about £21.1m the day before, as well as smaller disposals earlier in the week. The sales by Capital, which is also a major investor in Shell, came during a week in which another big shareholder in both energy companies voiced concerns about the BG takeover.

David Cumming, head of equities at Standard Life Investments, last Monday warned that the deal did not make “financial sense” with the price of oil at current levels.

Shell pounced on BG in April after Brent crude plunged to around $55 a barrel, but the commodity has since fallen to less than $37.

The continued weakness of the oil price has led to scepticism about whether the deal is still a sound acquisition by Shell and whether investors will approve the tie-up at shareholder meetings that will take place early next year. Shares in BG would tumble if its acquisition by Shell fell apart.

Capital did not return requests for comment on the reason for its BG share sales, and it is difficult to determine its stance on the takeover from the disposal alone.

The fund management giant also bought Shell shares last week, which further complicates the picture. However, given that Shell’s B shares are down 33.5pc since the BG deal was revealed, reflecting investor worries about the takeover, some in the market believe the oil giant’s stock would rise if its BG acquisition failed.

Spokesmen for BG and Shell declined to comment.

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