Shell ups Woodside offer to £4bn cash

Shell stepped up its battle to win control of the Australian oil and gas producer Woodside Petroleum yesterday by making a fresh cash offer direct to shareholders valuing the company at just under £4bn.

Shell stepped up its battle to win control of the Australian oil and gas producer Woodside Petroleum yesterday by making a fresh cash offer direct to shareholders valuing the company at just under £4bn.

The Anglo-Dutch oil giant's offer is worth A$14.80 (£5.49) a share. If enough shareholders accept it, Shell will then force an extraordinary meeting to vote on its revised merger proposals under which it would swap assets valued at between A$6.3bn and A$7.3bn for new shares in Woodside, raising its stake in the company from 34 per cent to around 56 per cent. Shareholders would then be able to buy back their shares at the same price of A$14.80.

Analysts praised the deal as a "win-win situation" for Woodside shareholders. But a foretaste of the political opposition Shell may encounter was given when the Australian Prime Minister, John Howard, said: "Like all red-blooded Australian prime ministers, I don't like declines in levels of Australian ownership if it can be avoided".

According to Shell, the transfer of assets to Woodside would give the company an underlying value of A$16 a share or A$10.7bn (£4bn). Shell said its cash offer was final and would not be increased. Woodside shares closed at A$15.25.

Shell's finance director, Stephen Hodge, said: "Any rational board would embrace this offer with open arms but we don't see Woodside's board as being rational.

"We don't want them dribbling away the value of the company in all sorts of ways that managements love but which shareholders aren't so keen on."