Shell Cheapest in Six Years for Buyers Who Brave Takeover Doubts
“In the current oil situation, the market is also taking a view there’s a bit of risk that Shell could walk away,”
By Rakteem Katakey: September 8, 2015
It’s the cheapest opportunity in six years to be a shareholder in Europe’s largest oil and gas company.
BG Group Plc, the oil and gas producer Royal Dutch Shell Plc agreed to buy for about $70 billion, is trading at a price equivalent to paying just over 14 pounds for a Shell B share, according to data compiled by Bloomberg. That would be the lowest valuation for Shell since the global recession of 2009 and a discount of 13 percent to the company’s current share price.
Investing in BG “would be the cheapest way into Shell, if you’re taking the view that the deal is going to go through,” said Philip Lawlor, a strategist at Smith & Williamson Investment Management LLP in London, which oversees about $24 billion of investments including in Shell and BG.
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