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Financial Post: Shell Canada could delist: circular

Buyout offer key

BY CLAUDIA CATTANEOFinancial Post ccattaneo@nationalpost

CALGARY • Shell Canada Ltd. may delist its stock if enough shareholders tender to a buyout offer from its parent, Royal Dutch Shell PLC, leaving holdout minority shareholders out of touch with its performance, an amendment to the Shell Canada directors’ circular said yesterday.

In the amended document, Shell Canada’s independent directors observe that if Royal Dutch Shell collects enough shares, Shell Canada’s remaining shares may become increasingly illiquid, affecting their value.

“Shell Canada may fail to continue to qualify for listing on the TSX (which could further affect the liquidity and market value of the shares held by any shareholder who chose not to tender their shares in the offer),” the document says.

As well, the company may no longer be subject to U.S. and Canadian reporting requirements, in which case “Shell Canada may cease to regulary provide its shareholders with reports concerning its performance,” the document says.

Royal Dutch Shell, the Anglo Dutch oil major, has bid to buy out the 22% of Shell Canada it doesn’t already own. Its $45 a share offer expires at the end of next week.

But several large shareholders are unhappy with the bid price and are looking for an offer in the $50 range.

One top shareholder, Len Racioppo, president of Jarislowsky Fraser Ltd with 29.5 million shares of Shell Canada, has said he’s prepared to “grow and prosper” with the company, which recently announced a fivefold increase in production from its oilsands operation in Alberta.

Shell Canada’s independent directors are backing the parent’s takeout price, after negotiating a $5 increase since Royal Dutch Shell made its first offer last fall.

In their amended circular, the directors say the offer requires the approval of unaffiliated shareholders.

It notes that non-tendering shareholders would likely have the right to go to court for a determination of the fair market value of their shares.

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