Royal Dutch Shell has revised its offer to acquire the outstanding common shares of its subsidiary Shell Canada Limited, increasing the offer per share to C$45 from the C$40 that it had offered in October 2006.
<p>Royal Dutch Shell, the largest oil company in Europe, already owns 78% of its Canadian subsidiary and its offer for the remaining stake values Shell Canada's fully diluted minority share capital at approximately C$8.7 billion.<br /><br />According to Shell, the special committee and board of directors of Shell Canada are backing the offer. Bloomburg, however, has reported Len Racioppo, president of Jarislowsky Fraser Limited, which manages 29.5 million Shell Canada shares, as commenting: We won't be tendering at this price. <br /><br />Royal Dutch Shell said that the acquisition would yield numerous benefits for Shell Canada, including simplified organization, financing and technology capabilities. The company itself also stands to gain substantially, in the form of access to Shell Canada's oil sands project in the Athabasca region in northeastern Alberta, which may contain up to 175 billion recoverable barrels.<br /><br />Royal Dutch Shell commented that its Shell Investments Limited subsidiary will now proceed with the offer by way of a takeover bid and that the offer, once launched, would be open for a minimum bid period of not less than 35 days. The new offer will be conditional on more than 50% of the outstanding shares held by the minority shareholders of Shell Canada being tendered.<br /><br />Bloomburg reported that, after the offer, Shell Canada's stock rose to C$45.25 on the Toronto Stock Exchange.</p>