Shell defends $55/share offer for Barrett Resources

Shell Exploration & Production Co. Wednesday defended its takeover bid for Barrett Resources and questioned Barrett�s strategy. Shell said it found �no basis� for Barrett board�s conclusion the Shell cash offer is inadequate.

By the OGJ Online Staff

HOUSTON, Mar. 28�Shell Exploration & Production Co. Wednesday defended its takeover bid for Barrett Resources in a letter to the Barrett board. Shell gave Barrett until May 11 to seek other buyers.

The letter was written by Walter van de Vijver, president and CEO of Shell Exploration & Production Co., the exploration and production arm of Shell Oil Co.

Van de Vijver said he found �no basis� for Barrett board�s conclusion that the Shell cash offer of $55/share is inadequate.

�We are also concerned that your board might pursue a strategy to remain independent instead of maximizing shareholder value by selling the company,� Van de Vijver said.

Barrett Resources last week rejected the bid, saying it would seek alternatives, which could include a sale to another company (OGJ Online, Mar. 23, 2001)..

�You and your board, as well as your financial advisors, would probably acknowledge that the Barrett stock is trading in the low $60's because of market speculation that Shell might raise its bid or that another credible suitor may materialize at those levels,� Van de Vijver said in his letter.

More than 20 members of Shell�s internal technical staff as well as outside consultants evaluated Barrett and several other companies with properties and operations in that region.

�We believe our valuation is right on target,� Van de Vijver said. �We know that Barrett briefly traded in the high $50's when the natural gas markets were at all-time high prices this winter, but those share prices have proved to be unsustainable for Barrett and its peer group companies.�

Shell repeated its earlier intention to take its proposal directly to Barrett Resources� shareholders by means of the written consent process.

Van de Vijver proposed that the Barrett Board continue seeking alternative strategies through May 11.

�If during that period the Barrett board receives a binding proposal offering superior consideration for the company, the Barrett board would be free to accept the higher offer. Otherwise, the company would be sold to Shell under the terms of the merger agreement,� the letter said.

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