Sweetened bid for Shell rumoured
By CP
TORONTO -- Parent company Royal Dutch Shell PLC is back on the radar as a potential buyer for Shell Canada Ltd.
There are rumours of a 15% sweetened takeover offer in the works, but some investors say even the higher value isn't nearly enough.
Royal Dutch is reportedly preparing to increase its $7.7-billion bid to a price that would be worth $46 to $48 per share.
But the potential offer could face a roadblock from investors, according to major shareholder Bissett Investment Management.
Garey Aitken, a portfolio manager at Calgary-based Bissett, said he places any acceptable offer north of $50 per share.
"I recognize that can be somewhat opportunistic ... but with this situation, ourselves and other significant shareholders have put a fair bit of thought into the proper valuation range on this," Aitken said yesterday, adding he doesn't want the value of the company to be based on "immediate-term numbers," such as results in 2006 or 2007.
"This is not a broken company and I'm not looking at this as a breakup. This is a very well-run, going concern."
Aitken has expressed his view to the companies in the past, but he hasn't been contacted by Royal Dutch about the rumoured offer.
Yet, investors and analysts are divided over whether the offer Royal Dutch is reportedly mulling gives sufficient value to Shell Canada.
One Canadian analyst said the potential higher bid is already above what he expected from the initial Royal Dutch offer back in October.
At that time, the company was willing to pay $40 per share in hopes it could position itself as a major player in the Alberta oilsands.
Shell Canada shares rose 82 cents to $44.90 on the TSX.
AI
