Woodside Petroleum has signed a binding buy-back agreement with Shell Australia to purchase 78.3 million Woodside shares from Shell via a selective buy-back at a price of US$ 2680 million. This represents approximately 9.5% of Woodside’s issued share capital.
The proposed buy-back price of US$ 2680 million is based on a share price of AU$ 36.49, representing a 14% discount to the volume weighted average price of Woodside shares over the five trading days up to and including 16 June.
Shell has also entered into an agreement to sell another 78.3 million shares, representing 9.5% of Woodside’s issued capital, via an underwritten sell-down to institutional investors at AU$ 41.35 per share. The sell-down should be complete by 18 June.
Shell’s holding in Woodside would reduce from 23.1% of Woodside’s issued capital to a maximum of 4.5% following completion of the selective buy-back and sell-down.
The buy-back is subject to a number of conditions including Woodside shareholder approval, an independent expert providing an opinion that the transaction is fair and reasonable to all Woodside shareholders, and consent under a number of Woodside’s facility agreements.
Woodside’s Board of Directors recommends that shareholders (excluding Shell and its associates) vote in favour of the selective buy-back.
Woodside CEO Peter Coleman said the combined transaction would deliver real value to Woodside shareholders through enhanced earnings per share, cash flow per share and dividends per share.
Coleman commented: “This combined transaction is an efficient and disciplined use of capital and creates value for all our shareholders. In parallel, it allows us to optimise the company’s near-term capital structure, while maintaining the capacity to continue to develop existing projects and make additional investments in new growth opportunities.
“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.”
Woodside has enjoyed a long and productive relationship with Shell, which will continue through common investments in established projects, such as the North West Shelf Joint Venture, and growth opportunities, such as the Browse and Sunrise Joint Ventures.
Adapted from press release by Katie Woodward
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