Shell Trims Interest in Woodside, Selling 19% Stake for Around $5B

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Royal Dutch Shell plc trimmed its stake in Woodside Petroleum Limited to 4.5 percent from 23.1 percent after an announcement by the European oil major Tuesday that it is selling approximately 156.5 million shares in the Australian company for around $5 billion. Shell’s sale of 19 percent of Woodside’s issued share capital will be through an underwritten sell-down to equity market investors and a selective share buy-back by Woodside. 

“Today’s announcement is part of our drive to improve Shell’s capital efficiency and to focus our Australia growth in directly owned assets … It doesn’t change our view of Australia as an important player on the global energy stage, or Shell’s central role in the country’s energy industry,” Shell CEO Ben van Beurden said in a press release.

Shell’s subsidiary, Shell Energy Holding Australia Limited (SEHAL) has engaged two investment banks to sell 78.27 million shares, equivalent to around 9.5 percent of the issued capital in Woodside, through an underwritten sell-down at AUD 41.35 per share.The sell-down is expected to complete June 18.

Woodside will buy-back 78.27 million of its shares from SEHAL at a price of $2.68 billion or $34.24 per share, comprising a dividend component of $26.29 per share and a capital component of $7.95 per share, as agreed with the Australian Taxation Office (ATO) in a private ruling. Completion of the buy-back, expected in early August, will be subject to limited conditions, including consent under a number of Woodside’s facility agreements, an independent expert opinion and Woodside shareholder approval. “This combined transaction is an efficient and disciplined use of capital and create value for all our shareholders … and resolve the uncertainty in relation to Shell’s shareholding that has existed for several years,” Woodside CEO Peter Coleman said in a separate press release.

“Woodside is an important strategic partner for us, through our investments in established projects such as the North West Shelf and growth opportunities such as Browse … We are pleased we have been able to work with Woodside to find a solution that allows us both to meet our strategic objectives,” Shell Australia’s Country Chair Andrew Smith added. 

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