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Globe and Mail: CIBC values Shell Canada at up to $48 per share

DAVID EBNER

Royal Dutch Shell PLC’s formal offer for Shell Canada Ltd. contains an independent valuation of Shell Canada Ltd. that values the firm at as much as $48 a share, higher than Royal Dutch’s bid.

Royal Dutch is offering $45 a share, or $8.7-billion, for the 22 per cent of Shell Canada it doesn’t already own. The energy multinational filed its take-over bid circular for Shell Canada on Thursday afternoon with Canadian securities regulators and the document include the valuation done by CIBC World Markets Inc. on behalf of Shell Canada, which concluded a per-share range of between $42 and $48.

The publication could reignite interest in the Royal Dutch takeover of Shell Canada, which began last October with a bid of $40 or $7.7-billion. According to the circular, Royal Dutch resisted raising what it called a “full and fair” offer but in January began to say it would consider a higher bid.

On Jan. 19, a suggestion of $43.50 a share from Royal Dutch was “not favourably received” by Shell Canada’s board of directors.

 By Jan. 22, a Monday, Shell Canada told Royal Dutch that $45 a share in cash would work, a deal that was formalized and announced by the next morning.

Royal Dutch has said it requires more than half of the minority shares to be tendered to the offer and investors holding at least 20 per cent of minority stake have said they won’t sell at $45, wanting at least $50.

Until late last week, stock of Shell Canada was trading higher than $45, above Royal Dutch’s increased offer, suggesting some investors believed another bump in the bid could emerge. Last Thursday, Royal Dutch chief executive officer Jeroen van der Veer told his shareholders on an earnings conference call that the company would “move on” if the $45 a share bid failed.

Shell Canada stock sunk immediately, falling below $45, and Thursday remained below that mark, closing at $44.82, down 5 cents or 0.1 per cent.

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