Royal Dutch Shell is proposing to take over BG Group for approximately £36bn in a mix of cash and shares.
“We have concluded that the proposed terms of the acquisition of BG are value destructive for Shell shareholders,” said head of equities David Cumming. “This view is based on the downside risks to Shell’s oil price assumptions plus the tax and operational risks surrounding BG’s Brazilian asset base. Consequently we shall vote against the deal.”
“The shareholder meetings to approve this deal are a test of investor stewardship and the responsible use of shareholder rights,” added Guy Jubb, head of governance and stewardship at SLI. “We have a clear responsibility to vote our shares in the best interests of our clients. We have engaged with Shell to explain our views and to encourage them to re-negotiate. By voting against in respect of our clients who have an interest in Shell we are sending a clear message to Shell’s board, reinforcing our opposition to the deal on the proposed terms.”
SLI owns 0.4% of the A shares in Shell and 1.7 % of the B shares placing it within the top 20 shareholders.
The possible deal is being pursued against a background of turmoil and uncertainty in the oil industry of course, due to the sharp slide in global prices.