Thursday, 8 March 2018

Shell and Blackstone join forces to fuel $10bn BHP shale bid

Shell, the FTSE 100 oil behemoth, is plotting a $10bn (£7.3bn) joint takeover bid for the American shale division of BHP, the world's biggest miner.
Sky News has learnt that Shell and Blackstone, the private equity firm, have agreed to work together on an offer for the assets, which were put up for sale last summer by BHP amid pressure from an activist investor.
A joint offer from Shell and Blackstone would be only one of several credible proposals that BHP is expecting to receive for the US shale operations, according to banking sources.

If they were to succeed with a bid, it would be the largest takeover in which Shell has been involved since its £35bn purchase of BG Group in early 2016.

The shale auction, which includes a number of fields in the prized Permian Basin, is expected to lead to a deal later this year.

BHP has indicated that it will consider a separate stock market listing for the division if it fails to generate sufficient value from a trade sale.

It also said this week that it would look at asset swaps as part of the disposal plan.

"Shale is just simply not as capital efficient as the other opportunities for investment across the BHP portfolio, and it's failed to generate competitive returns on capital employed," BHP's petroleum boss Steve Pastor was reported to have said this week.

For Shell, a takeover of the BHP business would accelerate its plans for shale to become a material cash engine by the mid-to-late 2020s.

SKY      News.