Shell’s proposed combination with BG Group came across a first obstacle on the road towards the shareholder vote on January 27 as Standard Life Investment opted to vote against the merger.
Reuters reported David Cumming, head of equities at Standard Life Investments, saying that the proposed terms of Shell’s acquisition of BG are value destructive for Shell shareholders.
Cumming noted that SLI’s conclusion is based on the downside risk to Shell’s oil price assumptions and risks carried by BG’s Brazilian assets. As a consequence of such conclusion, Standard Life Investments intends to vote against the deal.
However, Shell is still expected to have the backing of its investors as the company’s CFO Simon Henry and CEO Ben van Beurden hold talks with leading investors in order to gather information prior to the January 27 vote.
Contrary to Standard Life Investment, Institutional Shareholder Services, advisor of around 5 percent of Shell’s small and medium shareholders supports the deal due to the positive economics to be realized within a short time frame.
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LNG World News Staff