Shell proceeds with offer to buy Barrett stock

Darius SnieckusOGJ Online

LONDON, Mar. 12�Shell Oil Co. said Monday that it would proceed with its proposed all-cash takeover of Barrett Resources Corp., after the Denver-based independent�s board last week turned down the supermajor's $2.2 billion bid in favor of opening its books to "all qualified parties".

Walter van de Vijver, chief executive of Shell's exploration and production arm, Shell E&P Co., said the company considered it a "positive sign" that Barrett's board of directors were "considering strategic alternatives" to Shell's proposal.

Van de Vijver noted, however, that it was "not clear" if the Barrett board and its chief executive Peter Dea were "committed" to selling the company.

This lack of certainty, said van de Vijver, had lead Shell to decide to take its offer�equivalent to $55/share in the smaller company�directly to Barrett's shareholders "rather than participate in the auction process proposed by (the company's) board.

"We note that Barrett's board has not said that our offer is inadequate, so we assume that they and their advisors have concluded that our offer is in an appropriate range," he said. "We have decided to make our tender offer available to shareholders because we continue to believe that our full funded cash offer represents a full and fair value for the company."

Van de Vijver said a protracted auction process, which he said could take 2 months, would have "an adverse impact on (Barrett's employees') ability to effectively operated their business."

Shell originally made its offer on Mar. 1, claiming it represented a 24% premium on Barrett's market price on the last day of trading before the bid, when it closed at $44.24/share.