Barrett rejects Shell takeover bid

Darius Snieckus
OGJ Online

LONDON, Mar. 9� Directors of Barrett Resources Corp., Denver, Colo., have rejected a $2.2 billion cash offer from Royal Dutch/Shell Group, setting the stage for a possible hostile takeover attempt by Shell.

The Barrett board gave company management the green light to pursue "strategic alternatives" to Shell's Mar. 1 proposal to acquire all Barrett common stock at a price of $55/share. The bid represented a takeover price of around $1.8 billion, along with the assumption of some $400 million in debt (OGJ Online Mar. 7, 2001).

"The board has determined that, in light of the Shell proposal and relevant industry conditions, it is appropriate to take all necessary steps to maximize shareholder value," the company said in a statement. "Accordingly, it has authorized management to pursue strategic alternatives, including seeking proposals from a number of qualified parties, rather than commencing negotiations solely with Shell under artificial deadlines that only serve Shell�s interests."

Barrett said it would open its books to competing offers "to facilitate a full appreciation of the value of (the company's) assets." The company noted that Shell�s bid was based on publicly available information and not confidential "nonpublic" data that Barrett would now provide to ensure it was "properly" valued for merger or takeover.

"We will invite Shell to participate in this process," said Peter Dea, Barrett's chief executive officer. "If Shell attempts to bypass this orderly process designed to maximize shareholder value, the board will consider that action in due course. In the meantime, the board urges shareholders to take no action with respect to their holdings of the company.

"Shell and other potential parties would find it highly important to consider confidential, nonpublic information regarding the company�s focused natural gas potential in the Rocky Mountain region," said Barrett.

Barrett's management and advisors would "promptly assemble materials to be shared with qualified parties," it added.

Although a Shell spokesman said that it would respond formally to Barrett's rejection of its bid later today, earlier indications were that the Anglo-Dutch energy group would press ahead with its plans.

Walter van de Vijver, chief executive of the Shell exploration and production arm, Shell E&P Co., said Wednesday when making the offer that "in the absence of a positive response" from the Barrett board, Shell would launch a fully funded all cash tender offer for outstanding shares in the company.

Contact Darius Snieckus at [email protected]