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Royal Dutch Shell look to complete unification of UK and Dutch arms

ABC Money.co.uk: Royal Dutch Shell look to complete unification of UK and Dutch arms

“Following the reserves overbooking scandal last year, Royal Dutch Shell had opted to unify its UK and Dutch arms in a bid to restore confidence in the company.”

Thursday 22 Sept 2005

LONDON – Oil giant Royal Dutch Shell has announced that it plans to by out the remaining shares that it does not already own in its Royal Dutch arm thereby taking the final steps towards the unification of its UK and Dutch arms in July.

Currently, Royal Dutch Shell holds 98.5 percent of the erstwhile Royal Dutch. After its merger with Britain’s Shell Transport and Trading in July, the firm said yesterday that the remaining shareholders have the option of either taking cash or equivalent new shares of the merged entity.

Following the reserves overbooking scandal last year, Royal Dutch Shell had opted to unify its UK and Dutch arms in a bid to restore confidence in the company. The proposed buyout of the remaining shares would be completed by merging Royal Dutch with a holding subsidiary Shell Petroleum NV. The company said that it expected to complete the buyout by the end of this year. The final terms of the deal would only be revealed in the fourth quarter of the year, Royal Dutch Shell said.

This announcement is great news to around 400 UK investors who had refused to sell their shares since they would have had to pay 40 percent capital gains tax. But another 1,700 residents in the UK were not so lucky as they had already sold their shares and paid the tax as well. Angela Knight, chief executive of the Association of Private Client Investment Managers and Stockbrokers (APCIMS) said, “We are pleased with Shell’s announcement. For the refusniks who held on to their Royal Dutch shares there is now something better on offer. There is no reason why Shell could not have done this at the start and if they had, then it could have saved a lot of heartache. It’s a victory for those who refused the offer because it would leave them with a huge tax bill.”

However, a Royal Dutch spokesman clarified that the company could not have offered loan notes from the start itself, “Because it was a share-for-share offer we could not have offered loan notes from the start. That would not have been consistent with the principles of the offer, which was a complicated multi-jurisdictional issue.”

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