Woodside rejects Shell

The Australian oil and gas producer Woodside Petroleum has declared unacceptable an assets-for-shares swap proposed by Royal Dutch/Shell that would give the oil giant control of Woodside.

The Australian oil and gas producer Woodside Petroleum has declared unacceptable an assets-for-shares swap proposed by Royal Dutch/Shell that would give the oil giant control of Woodside.

Woodside's independent directors said yesterdaythat the plan would not add to earnings per share and did not offer shareholders an adequate premium. The proposal would allocate Woodside a portfolio of Shell's upstream assets in Australia, New Zealand and Iran in exchange for 429 million shares that would boost Shell's stake in Woodside from 34.27 to 60 per cent. Woodside said the assets did not provide the strategic diversity that it had been seeking from new acquisitions.

Woodside's reaction had been expected by analysts, who predicted Shell would return with an improved offer. Shell yesterday said it was disappointed at the Woodside decision and would consider what action to take.