Setback for mega-merger
Standard Life Investments to oppose Shell-BG deal
Standard Life Investments will oppose oil company Shell’s £47 billion bid for BG.
The Edinburgh insurer, a major investor in Shell, tonight described the proposed megadeal as “value destructive”.
David Cumming (pictured), head of equities at Standard Life Investments, said in a statement issued after the markets closed: “We have concluded that the proposed terms of the acquisition of BG are value destructive for Shell shareholders.
“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.”
Guy Jubb, head of governance and stewardship, said: “The shareholder meetings to approve this deal are a test of investor stewardship and the responsible use of shareholder rights. 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.”
Standard Life Investments holds 0.4% of the A shares in Royal Dutch Shell and 1.7 % of the B shares.