Shell divests its millions of Woodside shares, opens door on eventual exit from Aussie firm
Royal Dutch Shell has decided to sell off 10 percent of its stake on Woodside or more than 78 million shares, a move characterised by analysts as a step away from the giant oil firm's non-core businesses.
The sale of the Perth-based oil and gas company's stocks would amount to a total of $3 billion, according to Shell, and upon completion, would reduce the oil firm's stake on Woodside from its current 34 percent to 24 percent.
Shell, however, gave its assurance to Woodside that it would hold on to its remaining shares for at least a year more though the company refused to discount the possibility of another sale in the event that an attractive offer would be tossed for its consideration within the given period.
Following Shell's recent investments on the thriving coal seam gas industry of Queensland, resource analyst Peter Strachan called the oil firm's move as logical divesting in order to focus more on its core holdings.
Mr Strachan pointed out that the decision to divest at this time brings more than $3 billion at Shell's disposal, which enables the company to re-channel its resources on other investments that promise better prospect of return for Shell shareholders.
Market analysts said that likely taker of the Woodside shares put up for sale by Shell would be BHP Billiton Ltd though UBS shot down the speculations by its clarification that bulk of the buyers were institutional investors.
Also, managers of superannuation funds did not waste time as a big chunk of the sale was cornered by the retirement fund sector.
Still, as Shell has specified on its statement, the possibility of takeover by a corporation is a strong possibility according to Tim Shroeders of Pengana Capital, who pointed out that "Shell have left the door open in terms of being open to future bids and possible takeover of Woodside should that eventuate."