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Shell confident of backing for BG takeover as crucial vote looms

Screen Shot 2016-01-23 at 20.43.08By Jillian Ambrose, Ben Martin: 7:00PM GMT 23 Jan 2016

A host of the world’s largest investors are expected to back Shell’s troubled multi-billion pound takeover of BG Group this week.

Shell and BG shareholders will vote on Wednesday and Thursday to approve the deal, which has been called into question by the plunge in the oil price. David Cumming, head of equities at Standard Life Investments, has been the most vocal opponent of the takeover, branding it “value destructive for Shell shareholders”.

However, despite worries that Shell is overpaying for its smaller rival, most of the City’s biggest investors – many of whom hold stakes in both companies – are expected to vote in favour of the tie-up this week.

“The vote could be reasonably close but I would expect it to go through,” said Bernstein analyst Aneek Haq. “Most oil specialists support the strategic and economic rationale for the deal, so despite some investor concern it should go through.” Richard Buxton, the chief executive of Old Mutual Global Investors, has publicly given the deal his backing, as have fund managers at Aberdeen Asset Management, Artemis, Allianz Global Investors, Axa Investment Management, and Henderson.

Shell also received a major boost last week when the world’s biggest sovereign wealth fund, Norway’s Norges, said it would approve the takeover. The fund is BG’s second-largest shareholder and Shell’s fifth-biggest. It has been suggested that the Qatar Investment Authority, which is a major Shell shareholder, is also supportive.

In another fillip, Institutional Shareholder Services, an influential advisory firm, backed the takeover for its “compelling strategic rationale”.

Glass Lewis, which consults with 12 of the 50 largest investors in Shell, is also in favour.

BG shareholders need to vote in favour of the deal with a 75pc majority and Shell needs a simple majority.


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