Shell in exclusive talks to buy Post Office broadband arm
LaToya HardingContributor
The deal is expected to cost Shell less than £100m ($133m) and will likely take weeks to finalise.
The Post Office’s broadband arm has around 500,000 customers.
A source close to the Post Office said it would ensure that no postmaster is out of pocket as a result of the sale, with its telecoms arm accounting to just 0.3% of their total pay during the last financial year, the broadcaster said.
Nick Read, its chief executive, is also said to be mulling options for its insurance arm.
Reports of Shell scaling up in the industry follows its purchase of retail energy and broadband supplier First Utility in 2018. It rebranded the business Shell Energy Retail after it seized control.
Shell Energy retail has about 130,000 broadband customers in the UK and 870,000 domestic energy accounts.
In October, Shell announced plans to hike payouts to shareholders, despite profits nosediving and mass job cuts as coronavirus hammers the industry.
The company posted adjusted earnings of $955m, an 80% decline on its third quarter a year earlier but still better than expected by analysts.
The company announced plans to drastically curb its net debt from $73.5bn to $65bn, and then distribute up to 30% of cashflow from operations to shareholders through dividends and buybacks.
Shell also emphasised plans to become a net-zero energy firm by 2050 “or sooner,” including commercialising hydrogen and biofuels.
It said both lower demand and lower oil and gas prices were to blame for lower earnings. Upstream production was down 14% year-on-year, “due to OPEC+ curtailments, lower gas demand and hurricanes in US Gulf of Mexico.”
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