BG Group shareholders Axa and Wellington Management sell down stakes; AAM, Old Mutual, Henderson and QIA believed to support proposed takeover by Shell
BG Group [LON:BG] shareholders Axa Investment Managers and Wellington Management have sold down their stakes in the FTSE-100 energy company over the past few weeks, The Times reported.
The newspaper said Axa has offloaded 18.4m BG shares, reducing its shareholding by close to 66% since October, while Wellington has disposed of 11.82m BG shares, one third of its stake, since 30 September. The article did not cite a source for the information.
The disposals, by two of BG group’s biggest investors, indicate growing unease about Royal Dutch Shell’s [LON:RDSB] proposed GBP 36bn (EUR 48.78bn) takeover bid for BG, the item said.
Shell yesterday, 22 December published a circular detailing plans for an additional USD 5bn of extra reductions in capital expenditure and operating efficiencies next year in an attempt to strengthen support for the proposed takeover.
Shell intends to put the deal to shareholders on 27 and 28 January with a view to completing the deal on 15 February, the item noted. The takeover requires the approval of shareholders speaking for 50% of Shell’s shares, according to the report.
It is thought that most of Shell’s big investors support the deal, and many of those shareholders also hold stakes in BG, the article continued.
The item went on to cite sources who said investors including the Qatar Investment Authority (QIA), Old Mutual, Henderson and Aberdeen Asset Management (AAM) are supportive of the takeover proposal.
Analysts and a fund manager cited by the report had mixed opinions on the chances of the deal proceeding. One fund manager quoted in the article said it was hard to see how the deal could be voted down, given the 50% approval requirement.
A UBS analyst cited by the report noted worries that Shell might amend the deal terms due to the fall in the price of crude oil over the past year and voiced doubts that Shell would be able to win the support of the required 50% of shareholders. However, UBS doubts that the takeover will be voted down, citing the deal's merits over the long term, according to the newspaper.
A Daily Mail report quoted AAM senior equities investment manager Ben Ritchie, who said the fund manager is “supportive” of the deal, adding that there is a “strategic logic” to the takeover. Ritchie conceded that the a long-term upturn in oil prices is necessary for the numbers to add up, but added that an expectation of increased oil prices over the coming year and a half to two years is “not unreasonable.”
The fund manager also dismissed worries over the chance of the deal forcing Shell to cut its dividend.
It is believed that Aberdeen, which holds stakes of 1.8% in BG and Shell, is one of a group of supportive shareholders that own a combined 10% stake, the item said. Other shareholders in that group include Allianz Global Investors, Old Mutual Global Investors, Henderson and the QIA, according to the newspaper.
As previously reported Shell shareholder Standard Life Investments has voiced doubts as to the financial merits of the proposed takeover.
The Times report appeared on page 44 of the print edition of the newspaper on Wednesday, 23 December