Not all shareholders will vote Yes! for Shell’s takeover of BG Group

Shell’s proposed multi-billion dollars takeover of UK’s BG Group will not be passed by a unanimous vote “FOR” at the upcoming shareholders meeting.

At least not according to a statement by Standard Life Investment, a Shell shareholder, which said it will vote against the merger at the shareholders’ meeting scheduled for January 27, 2015.

David Cumming, head of equities at Standard Life Investments, said that the proposed terms of the acquisition of BG are value destructive for Shell shareholders.

Cumming said: “This view is based on the downside risks to Shell’s oil price assumptions plus the tax and operational risks surrounding BG’s Brazilian asset base. Consequently we shall vote against the deal.”

Headquartered in Edinburgh, Standard Life Investments holds 0.4% of the A shares in Royal Dutch Shell and 1.7 % of the B shares. Overall, the company manages assets of £250.6bn.

Guy Jubb, Head of Governance and Stewardship at Standard Life Investments, added : “The shareholder meetings to approve this deal are a test of investor stewardship and the responsible use of shareholder rights. We have a clear responsibility to vote our shares in the best interests of our clients.”

“We have engaged with Shell to explain our views and to encourage them to re-negotiate. By voting against in respect of our clients who have an interest in Shell we are sending a clear message to Shell’s Board, reinforcing our opposition to the deal on the proposed terms.”

Offshore Energy Today reached out to Shell, seeking comment on the decision by Standard Life. A Shell spokesman said: “We’re confident the deal retains broad shareholder support and will complete as expected.”

Shell in December 2015, fulfilled the final pre-condition to the recommended combination last week, when its takeover offer for UK’s energy firm BG Group received the unconditional merger clearance from the Chinese Ministry of Commerce.

This was the final regulatory clearance that was a pre-condition to the combination. Other pre-conditional clearances had already been received from the authorities in Australia, Brazil and the European Union, with the merger now up to a shareholder vote in both companies.

Offshore Energy Today Staff