Dividend doubts creep in after Shell’s £47bn swoop for BG Group
Article by Andrew Neil published 11 April 2015 byproactiveinvestors.co.uk
Dividend doubts creep in after Shell’s £47bn swoop for BG Group
“We think Shell’s acquisition of BG will likely be viewed as strategically smart and opportune, but should oil prices stay lower for longer, it could put pressure on UK dividends and be detrimental to UK pension investors.”
Shell’s swoop for BG Group (LON:BG.) failed to win over the Anglo-Dutch oil giant’s investors yesterday.
As BG soared, Shell shares (LON:RDSB) moved in the opposite direction and eventually posted their biggest fall since 2008.
At £47bn, the problem for boss Ben van Beurden is that some stakeholders fear he’s been too generous with his offer.
Shell’s dividend, which accounts for close to 10% of the total pay-out to UK equity investors, is also a particular concern.
“Shell has stuck its dividend reputation to the mast with this deal,”Investec oil and gas analyst Neill Morton told Proactive.
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