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Shell picks banks to advise on shake-up

Financial Times: Shell picks banks to advise on shake-up

“more evidence yesterday of its new-found willingness to embrace the outside world”

By Clay Harris

Jul 14, 2004

Royal Dutch/Shell offered more evidence yesterday of its new-found willingness to embrace the outside world by recruiting Citigroup and NM Rothschild to advise on its structural shake-up.

The oil and gas group was criticised fiercely for an inward-looking and unaccountable culture after it was forced to cut its proved oil reserves by more than 20 per cent. It rarely uses external financial advisers – except for transactions – so the appointment is a coup for the two banks.

Citigroup, whose investment bank was formerly known as Salomon Smith Barney, is no stranger. In 2002, it advised Shell on the £4.3bn acquisition of Enterprise Oil and £2.2bn purchase of Pennzoil-Quaker State, both prices including debt. It also advised on the 2001 purchase of stakes in Equilon and Motiva from Texaco.

Shell, moreover, has also seen Rothschild in action on the other side of the table as adviser to Enterprise. Execution of that mandate helped Rothschild win the accolade of European bank of the year from Acquisitions Monthly.

At the very least, investors have called on the company to scrap its 100-year-old dual-board structure and consider a traditional chief executive role. And Lord Oxburgh, chairman of the UK side of the business, has said the group is considering some “extreme structures”, which may mean even more money-spinning fun for Citigroup and Rothschild.

The banks join Slaughter and May and De Brauw Blackstone Westbroek, the UK and Dutch firms that are legal advisers to Shell’s structural review team, headed by Sir John Kerr.

© Copyright The Financial Times Ltd

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