Royal Dutch/Shell Group's wholly owned unit Shell Oil Co. earlier this month offered to acquire all the common stock of Denver-based independent Barrett Resources Corp. at a price of $55/share in cash.
Shell last week said Barrett's board had promised to respond to its proposal "no later than Mar. 9." The offer represents a takeover price of $1.8 billion, along with the assumption of $400 million in debt, said Shell.
Shell strategy
"Shell appreciates the seriousness with which Barrett's board is approaching our proposal, and we are hopeful that the board will respond favorably," said Walter van de Vijver, chief executive of Shell Oil Co.'s exploration and production arm Shell E&P Co.
"We are standing by and are ready to negotiate a merger agreement promptly so that Barrett shareholders can consider our offer."
Van de Vijver stressed that "in the absence of a positive response" from Barrett's board, Shell would nonetheless launch a fully funded all-cash tender offer for outstanding shares in the company.
Barrett portfolio
Taking over Barrett would give Shell an "immediate material presence" in the Rocky Mountain region, as well as "significant additional natural gas production and reserves," said van de Vijver.
"This transaction will strengthen and diversify our asset portfolio and enhance Shell's natural gas position with tangible growth opportunities outside our existing core areas," he added.
Barrett's assets are primarily in Colorado, Wyoming, Utah, Kansas, Oklahoma, New Mexico, Texas, and the Gulf of Mexico.
