So will BHP Billiton, rejected in Canada, have a nibble at Woodside Petroleum now that Shell has signalled its a seller?
Judging by market commentaries this morning, its a now a common view that BHP will at least run the ruler over a Woodside deal.
The copany was a shareholder at one stage, but sold in one of the less clever deals of former management.
Now Royal Dutch Shell has put 10% of the company, nearly one third its 34% stake, on the market through UBS, and the remaining amount is being placed in escrow to sell in 12 months’ time or sooner, depending on offers.
Shell said it was selling the Woodside stake at $42.23 a share, well below the market price yesterday
The market had no inkling of the deal, Woodside shares drifted up 9c yesterday to $45.86, while BHP shares drifted down 9c to $45.16.
Shell wants $3.3 billion for its 10% stake, which values Woodside at around $36 billion.
But if BHP bid, the cost would be around $40 billion, or roughly what, it was going to pay in the rejected play for PotashCorp in Canada.
Woodside was valued at $35.9 billion at yesterday’s close.
It operates the massive North West Shelf project in Western Australia which accounts for about 40% of our oil and gas production.
UBS would now expected to offer the stock to institutions, analysts said, adding the move was a surprise because the stake could have been offered in one piece to a potential bidder.
But Shell has the right to sell 3% to a strategic bidder, so long as they agree to escrow the shares for a year, or agrees to a bona fide bid for Woodside.
Shell said the sale is part of a global effort to improve capital efficiency and simplify the group.
Shell said that it will increasingly focus its investment in Australia through direct investment in assets and joint ventures, rather than indirect stakes.
That means its own smaller lNG projects in the region are being advanced, along with the huge Gorgon project.
Analysts said last week Woodside was being eyed as a potential takeover target with its long-serving chief executive, Don Voelte, due to step down in the second half of next year.
Woodside shares rose last week on speculation BHP would take a look after the Canadian rejection.
The six equal partners in the North West Shelf joint-venture are Woodside, BHP Billiton, Chevron, BP Plc, Shell and Japan Australia LNG (MiMi) Pty Ltd, which is a venture of Mitsubishi Corp and Mitsui and Co.
Shell is also a partner in the rival $43 billion Gorgon LNG project operated by Chevron Corp.
Qantas Airways shares fell sharply yesterday on the latest bad news on A380 engine concerns, and then halved the loss to close at $2.80.
That was nevertheless a loss of 6c, or 2.1%, on the day.
The shares had been down 12c, or 4.2%, to $2.74 before the afternoon bounce, which came as the wider market dipped
.
The shares in fact closed on the day’s high, but are still down from the $2.89 level of the day the A380 engine exploded as the Airbus climbed out of Singapore on the way to Australia.
The shares fell after CEO Alan Joyce said checks had revealed problems with three Rolls-Royce engines on its A380s, meaning the six aircraft would remain grounded for the time being.
"On three of the engines what we have found is slight anomalies," Mr Joyce told ABC Radio.
"Oil where oil shouldn’t be on the engines and we are just trying to check what could the cause of that could be.
"These are new engines on new aircraft; they shouldn’t have these issues at this stage, so it’s given us an indication of an area for us to focus into."
Meanwhile, Leighton Holdings has lost its attempt to force the suitor for its German parent, to extend a bid to local shareholders.
The Takeovers Panel yesterday issued a statement rejecting what was a heroic attempt from Leighton to block the Spanish builder ACS from pursuing $5 billion hostile takeover of Germany’s Hochtief.
Hochtief and its listed Australian unit, Leighton Holdings, had asked the Takeovers Panel to force the Spanish firm to buy out Leighton in the event that ACS’s bid for Hochtief succeeded and it became the majority shareholder in Leighton
ACS, headed by Real Madrid soccer club President Florentino Perez, has said it will offer Hochtief shareholders eight ACS shares for every five Hochtief shares they own.
Such a buy-out would have added at least another $4.5 billion to ACS’s bid.
ACS can’t afford to offer cash as its finances have been damaged by the sharp downturn in Spain’s economy, especially housing and construction.
"ACS welcomes the panel’s decision," the Spanish company said in a statement issued in Australia. "It is a clear signal that ACS’s offer for Hochtief can proceed as planned."
The panel said ACS’s takeover of Hochtief would not alter the situation for Leighton’s minority shareholders and noted the Spanish firm had already given assurances to that effect.
Since Leighton made the application on October 25, however, ACS has provided assurances in writing that Leighton would continue to enjoy independence from the parent group.
