Shell lifts bid for Woodside

November 24, 2000
Web posted at: 4:58 PM HKT (0858 GMT)

By Grant Holloway
CNN Interactive Writer

HONG KONG (CNN) -- Royal Dutch/Shell Group has made a revised bid for control of Australian energy group Woodside, offering $U.S. 1.1 billion ($A 2.1 billion) to gain a 56.2 per cent stake in the company.

Woodside said today it would evaluate Shell’s offer and provide advice to shareholders in due course. A response was not expected before Monday. The Woodside board rejected an asset-swap merger offer made by Shell in May, 2000.

The Shell offer is $A14.80 a share, plus a call option exercisable at $A14.80 should the bid be successful. Shell is also offering to inject a portfolio of its own energy assets into Woodside valued at between $A6.3 billion and $A7.3 billion.

The deal would see Shell, gain a further 21.9 per cent of Woodside and control of Australia's second largest energy group. Woodside is the operator of the $A12 billion North West Shelf oil and gas project off Australia's northern coast.

Shell is eager to increase its oil and gas assets in the Asian region amid higher energy prices and increasing demand from energy-hungry nations to Australia's north.

"The proposed merger will give Woodside the scale, size and operational reach it needs to become the premier listed oil and gas company in Australia and the Asia Pacific region," the chairman of the Shell Companies in Australia, Peter Duncan, said in a statement.

The bid however is subject to gaining approval from Australia's Foreign Investment Review Board.

Speaking on radio this morning Australian Prime Minister John Howard said he did not like seeing Australian ownership levels decline but that commercial interests had to be given a lot of sway.

"There will need to be a consideration made of the national interest if as appears to be the case there’s a significant reduction in the level of Australian ownership. I mean you say to me in general, do I like foreign ownership increasing? - no. But if you say to me do I want plenty of foreign investment in Australia? - I’d say yes," Howard said.

"I mean we cannot have it both ways. We cannot constantly say we want people to invest in this country, we want them to buy Australian assets, we want them to create jobs, invest in new industries, but when one comes along, say no you can’t have that one because we’d prefer it to remain in Australian hands."

Shell's exploration and production manager for the Pacific, Raoul Restucci, told a media conference that Shell did not want full ownership of Woodside because the company wanted Woodside to retain its primary stock exchange listing in Australia.

London-based Shell is the world's second largest publicly traded energy company.

Woodside shares jumped 75c to close at $A15.25 each on the Australian Stock Exchange today following the announcement of the offer.

High oil prices worry Asia, but cause no crisis yet

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