Woodside buy-back falls short

Woodside buy-back: Shell buy-back fails to stick

A US$2.68 billion share buy-back from Anglo-Dutch supermajor Shell of shares Woodside Petroleum has been knocked back after failing to secure enough of the shareholder vote.

Shareholders of the Australian independent voted to reject the buy-back at an extraordinary general meeting in Perth on Friday.

About 72% of shareholders voted for the proposition, while 28% voted against it.

The resolution needed a 75% acceptance rate to pass, meaning the buy-back has now fallen through.

Woodside chairman Michael Chaney said the board supported the buy-back as it is the only way Shell can sell off shares in an “orderly” fashion.

“In making our assessment of this transaction the board considered a range of capital management options including special dividends and selective and equal access buy-backs,” he said at the company’s meeting.

“The independent expert has concluded the transaction is fair and reasonable to all shareholders."

Initial Woodside shareholder votes regarding the buy-back were found to be 71.3% in favour of the buy-back and 28.7% against the resolution.

The proxy and direct votes proposed the buy-back of 78.3 million shares from Shell for about US$2.68 billion, with all of these voted now audited.

“However, the resolution required 75% approval of all votes cast in order to proceed and it looks like we shall fall short of that,” Chaney said before the vote took place.

A statement from Shell on Friday morning said it acknowledged the vote and the company "is reviewing its options in relation to its remaining 13.6% holding in Woodside".

The buy-back has faced considerable doubt in the media over the past week as the Australian Shareholders Association has ‘reluctantly’ supported the deal and the proxy vote numbers failed to impress.

Shell decided to shed shares worth $5 billion, reducing its equity to a small holding of just above 4%.

The sale brings to a conclusion a process that started in 2001 when Shell’s takeover bid for all of Woodside was rejected by the Australian government.

Shell then sold a 10% interest in Woodside in 2010.

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