BY CLAUDIA CATTANEOCalgary Bureau Chief
Financial Post [email protected]
CALGARY • CIBCWorldMarkets, hired by Shell Canada Ltd. directors to evaluate a minority takeout bid from its parent, values its shares at between $42 and $48, a directors’ circular said yesterday.
A committee of directors, headed by Derek Burney , agreed to back a $45 price because it’s in the mid-range of the fair market value range determined by CIBC, they said in the circular.
In addition, the directors supported the $45 bid because it represents a substantial premium (37.2%) over the share price before Royal Dutch Shell PLC made its first bid, at $40, last October.
They also they took into account that the offer is in cash, that if it is unsuccessful the share price may decline significantly, and that “there is no practical prospect of a competing offer for the shares by a third party given.”
Several minority shareholders have said they are not likely to tender at $45 and that they are looking for at least $50.
The circular reveals Shell Canada’s directors repeatedly held out for more money from Royal Dutch and rejected tentative offers at $43.50, $44.50 and $44.75.
The two sides came to terms on Jan. 20, when Royal Dutch agreed to pay $45 on the condition that the directors recommended the transaction.
Shell Canada shares fell 5¢ yesterday to $44.82 on the Toronto Stock Exchange.
Last week, Royal Dutch chief executive Jeroen van der Veer said he was prepared to walk away from the bid if there isn’t enough support.
The bid is open untilMarch 16 and requires the support of 50% of the minority.
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