Barrett board to consider Shell's latest offer of $60/share

Barrett Resources Corp., Denver, said Thursday its board would meet to consider Shell Oil Co.'s latest takeover offer of $60/share, an increase of $5/share. With 33.4 million shares outstanding, that would bring the acquisition to $2.007 billion, up $167 million from the previous offer. Shell also would assume $400 million of Barrett debt.


By the OGJ Online Staff

HOUSTON, Apr. 26 -- Barrett Resources Corp., Denver, said Thursday its board would meet to consider Shell Oil Co.'s latest takeover offer of $60/share, up $5/share.

With 33.4 million shares outstanding, that would bring the acquisition at $2.007 billion, up $167 million from the previous offer. Shell also would assume $400 million of Barrett debt.

Walter van de Vijver, president and CEO of Shell Exploration & Production Co., Houston, made the latest offer in a letter to Barrett chairman and CEO Peter Dea.

Commenting on the offer in a press release, Dea said, "We are very pleased with our process. It is proceeding expeditiously and in a manner designed to maximize value to our shareholders."

On Apr. 24, Barrett said a regulatory decision that will permit more infill drilling in the Piceance basin would add 212 bcf of reserves and $5-10/share to the value of its stock (OGJ Online, Apr. 25, 2001).

In the letter, Van de Vijver said Shell was increasing its offer to ensure it was "fairly considered" by Barrett, which has opened a data room and has invited bids from other firms.

He noted the $60/share represented a 36% premium over Barrett's trading level when Shell made its first offer in early March.

"We continue to see Barrett and its employees as the cornerstone of Shell's growth plans in the Rockies [where Barrett has the core of its portfolio of natural gas assets]," said van de Vijver.

The Barrett board recommended turning down the earlier Shell bid as "inadequate and not in the best interests" of the company's shareholders. Dea said last month the original offer did not fairly take into account the "positive outlook" for the worldwide market for natural gas.

Van de Vijver noted in his letter that Shell was extending its offer deadline to May 9, which it said would allow ample time for Barrett "to have fully canvassed the market and considered other bids."

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