By LAURA CHESTERS FOR THE DAILY MAIL: 16 JAN 2016
The last time Royal Dutch Shell cut its dividend was in 1945 when the Netherlands had just endured the ‘Hunger winter’ under Nazi occupation before the end of the Second World War.
Now investors are worrying their treasured dividend could be under threat again.
Shell is embarking on an audacious takeover of gas specialist BG Group. The £36bn deal will go to a shareholder vote at the end of the month. However, with the oil price at a 12-year low, many are warning the deal does not make sense.
And worse still, some are fearful that if it does go ahead it will mean Shell won’t be able to afford to keep paying its healthy dividend.
Shell pays the best dividend in the FTSE 100 and yields around 7.2 per cent on the current promised $1.88-a-share dividend. As Steve Clayton, head of equities research at broker Hargreaves Lansdown, explains: ‘Half of Holland would keel over in apoplectic horror if Shell ever cut the payout.’
A handful of institutional investors have already pronounced their views on the deal.