Woodside stake to be divested in pieces - bankers

December 26
12:19 AM 2013

A Reuters report quoted bankers who said that the 23.1% stake in Woodside Petroleum of Royal Dutch Shell will most likely be split or sold to institutional shareholders as opposed to divesting it in one piece to a strategic buyer.

According to the report, Shell's holding in the Australian oil and gas group is worth about $6.4 billion. The report also disclosed that the stake in Woodside was a leftover from Shell's attempt to abort its plan to acquire the oil and gas group back in 2001.

Shell reportedly viewed Woodside as a non-core asset. This year, the Anglo-Dutch company vowed to accelerate the sale of its assets in order to improve its financial cushion between its investment spending and cash inflow.

When the news agency requested a comment from both Shell and Woodside regarding the stake divestment plans, both companies declined to provide a comment on the future of the stake. Reuters was also unable to confirm the intentions of Shell regarding its stake in Woodside.

According to bankers, the Woodside stake is the most obvious strategy of incoming Chief Executive Ben van Beurden who will be taking over on January 1st next year. Along with the planned stake divestment, van Beurden intended to disclose its strategy pointers along with Shell's fourth-quarter results on January 30.

On the other hand, bankers said that despite the enticement the stake might be, it might attract less than expected number of bidders as other investor-owned foreign oil companies who could acquire the Woodside stake are also eyeing for asset divestments.

One banker said, "Bidder-wise, it's a tricky one. The deal is big enough to require a review by the government, and although Woodside is not as important as it was at the time when Shell's bid was blocked, it is still the largest independent oil company in Australia, so I don't think the Chinese NOCs would be welcome."

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