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Shell investors set to ditch dual listed structure

Reuters: Shell investors set to ditch dual listed structure:nif

Tue Jun 28, 2005

By Tom Bergin, European Oil and Gas Correspondent

LONDON (Reuters) – Royal Dutch/Shell (SHEL.L: Quote, Profile, Research) (RD.AS: Quote, Profile, Research) shareholders are expected to end a century of history on Tuesday when they vote on scrapping the group’s dual-listed structure.

Shell hopes the unification of its Dutch and British parent companies will help streamline its management structure, whose complexity was blamed for a damaging reserves overbooking scandal last year.

Shell is currently 60-percent owned by the Royal Dutch Petroleum Co. and 40 percent by the Shell Transport and Trading Co. Executives of the operating group are drawn from the boards of each holding company.

The unified firm, to be named Royal Dutch Shell Plc, will have clearer reporting lines and has pledged to be more responsive to shareholders.

Investors will meet in The Hague and London on Tuesday to vote on the merger plan. All indications from institutional investors and analysts are that they back the merger.

“It is expected that completion will take place, and that trading in Royal Dutch Shell shares will commence on 20 July 2005,” Citigroup said in a research note.

The new company will be headquartered in The Hague but have its primary listing in London. When it starts to trade it will likely be the world’s third-largest publicly traded oil firm with a market capitalisation of more than $200 billion (110 billion pounds).

Following the unification Shell’s weighting in the FTSE 100 share index is expected to more than double, creating a wave of buying from index-tracking funds.

Goldman Sachs said it expected $7 billion of extra buying interest, which would offer significant support for the shares.

The existence of a single Shell share could also help the group play a bigger role in oil industry consolidation. Shell Chief Financial Officer Peter Voser told a German newspaper earlier this month that the restructuring would allow Shell to use its shares as a currency for acquisitions.

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