Published On: Tue, Jun 17th, 2014

Shell Cuts Its Stake In Australia’s Woodside In $5bn Sale

Energy giant Royal Dutch Shell is cutting its stake in Australia’s Woodside in a share sale that will net it some $5bn (£3bn).Shell will sell around 156.5 million shares, which represents 19% of Woodside’s issued share capital.

Shell cuts its stake in Australia's

Upon completion, the European firm’s stake in Woodside will be reduced from its current 23.1% to 4.5%.

Shell has said in a statement it wants to focus its “Australian growth in directly owned assets.”

The company’s chief executive Ben van Buerden added: “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.

We continue to see Australia as an important place for us to invest and grow our business.”

Earlier this year Shell reported a 44% drop in first-quarter profits after it wrote down the value of refineries in Asia and Europe.

Share transactions

The cutting of its Woodside stake will take place over two stages.

Shell will offload a 9.5% stake or 78.3 million Woodside shares to institutional investors, at a price of $41.35 Australian dollars per share, by Wednesday.

And the Anglo-Dutch firm will also be selling another 78.3 million shares to Woodside in a buyback programme, at $36.49 Australian dollars per share.

The buyback is subjected to approval by Woodside’s shareholders, as well as independent expert opinion that the transaction is “fair and reasonable” to all Woodside shareholders.

Chief executive of the Australian gas and oil firm, Peter Coleman, said in a statement submitted to the Australian stock exchange: “This combined transaction is an efficient and disciplined use of capital and creates value for all our shareholders.

“The combined transaction will also increase our liquidity in the market and resolve the uncertainty in relation to Shell’s shareholding that has existed for several years.”

The Dutch firm had originally sold one-third of its Woodside stake in November 2010, for $3.3bn.