20th Sep 2005 06:30
Royal Dutch Shell announces the restructuring of certain subsidiaries andintended method of obtaining 100% of Royal Dutch shares20 Sept 2005Joint Announcement by Royal Dutch Shell plc ('Royal Dutch Shell') and N.V.Koninklijke Nederlandsche Petroleum Maatschappij ('Royal Dutch')SummaryRoyal Dutch Shell, the single parent company of the Shell Group, announces thatit proposes to implement an internal restructuring and merger of certain of itssubsidiaries to achieve governance, management and fiscal efficiencies. As partof the restructuring, Royal Dutch would be merged into a subsidiary, ShellPetroleum N.V. ("SPNV"), and the remaining shareholders in Royal Dutch (the"Minority") would receive cash or, at the option of UK resident shareholderswho so elect, loan notes exchangeable into Royal Dutch Shell A shares.The final terms, including the price to be paid in exchange for each RoyalDutch share held by the Minority, will be determined and announced in thefourth quarter of 2005. Following approval at an extraordinary general meeting("EGM"), the restructuring is expected to be completed by year-end.BackgroundFollowing completion of the unification transaction (the "Unification"),including the subsequent offer acceptance period that ended on 9 August 2005,Royal Dutch Shell holds approximately 98.5% of the outstanding shares of RoyalDutch and is the sole parent of the Shell Group.Royal Dutch Shell has announced previously that it reserved the right to useany legally permitted method to obtain 100% of the Royal Dutch shares.Restructuring of Royal Dutch Shell subsidiariesAs a result of a review to determine the most appropriate governance,management and fiscal structure for the companies beneath Royal Dutch Shellfollowing the Unification, the Board of Royal Dutch Shell now proposes tounwind Royal Dutch and Shell Transport's respective 60:40 cross holdings insubsidiaries which own directly or indirectly all Shell Group companies. Aspart of the restructuring Royal Dutch would be merged into a subsidiary, SPNV.Implementation of the restructuring will require a Royal Dutch EGM. Royal DutchShell intends to vote in favour of the restructuring at the EGM. Notice for theEGM will be given in due course and it is intended that the EGM andrestructuring will be completed before the year-end. The restructuring will besubject to receipt of any necessary consents and approvals and elements ofthese proposals are the subject of consultation with relevant staffrepresentative bodies as required.Acquisition of the interests of the Royal Dutch minorityThe proposed merger of Royal Dutch into SPNV will allow for the acquisition ona compulsory basis of the remaining interest in Royal Dutch held by theMinority. In the merger, as a consequence of the intended exchange ratio, theMinority will be entitled solely to a cash payment for the Royal Dutch sharespreviously held, or, for UK resident shareholders who so elect, to loan notesexchangeable for Royal Dutch Shell A shares based on a value that does notexceed the face amount of the loan notes.The Royal Dutch Shell Board believes that the acquisition of the shares held bythe Minority in this way will be simpler and quicker and therefore result in amore cost efficient process than the alternative Dutch statutory squeeze outprocedure.The Board of Royal Dutch has engaged ABN AMRO Bank N.V. as its financialadvisor. ABN AMRO will assist the Board in its evaluation of the fairness tothe Minority, from a financial point of view, of the exchange ratio and cashconsideration to be received in the restructuring by the Minority.If the merger is not completed as proposed, the Board of Royal Dutch Shellintends to commence Dutch statutory squeeze out proceedings in order to acquirethe shares held by the Minority. A squeeze out would result in the Minorityreceiving a cash payment in exchange for their Royal Dutch shares.Loan note alternative for UK-resident Royal Dutch shareholdersAs an alternative to the cash payment to which they would otherwise be entitledunder the merger, UK-resident Royal Dutch shareholders will be offered theopportunity to elect to receive loan notes that are exchangeable, at the optionof the holder or Royal Dutch Shell, into Royal Dutch Shell A shares. These loannotes will provide the ability to achieve a rollover for UK capital gains taxpurposes.The loan notes would have a total face amount equal to the cash payment that ashareholder would otherwise be due. Loan notes would be exchangeable for RoyalDutch Shell A shares on one or more fixed dates based on a value that does notexceed the face amount of the loan notes. The loan notes would be exchangeablefor Royal Dutch Shell A shares based on the market price of such shares at thetime of exchange, subject to a cap equal to the number of shares theshareholder would have been entitled to in the original offer. In the eventthat the cap applies, there would be no entitlement to incremental cashcompensation.Enquiries:MediaUK/USA/International:Stuart Bruseth +44 20 7934 6238Andy Corrigan +44 20 7934 5963Bianca Ruakere +44 20 7934 4323Netherlands:Herman Kievits +31 70 377 8750Henk Bonder +31 70 377 8750Institutional InvestorsUK:David Lawrence +44 20 7934 3855Europe:Bart van der Steenstraten +31 70 377 3996USA:Harold Hatchett +1 212 218 3112The exchangeable loan notes would only be available to electing UK residentshareholders providing an appropriate certification. The loan notes and theRoyal Dutch Shell Class A ordinary shares into which they are exchangeablewould not be offered to US persons and have not been and will not be registeredunder the U.S. Securities Act of 1933, as amended (the "Securities Act"), andmay not be offered, sold or otherwise transferred in the United States or toU.S. persons unless an exemption from the registration requirements of theSecurities Act is available.The loan notes will not be offered to persons who are established, domiciled orresident in the Netherlands. Shell Petroleum N.V. as issuer of the loan noteshas submitted a statement to the Netherlands Authority for the FinancialMarkets that the laws and regulations of the jurisdiction in which the loannotes are offered have been and will be complied with.ABN AMRO Bank N.V. ("ABN AMRO") is acting for Royal Dutch (and may providecertain financial or investment banking services to Royal Dutch Shell,including acting as Dutch exchange agent) and no one else in connection withthe transaction and will not be responsible to anyone other than Royal Dutchand Royal Dutch Shell for providing the protections afforded to clients of ABNAMRO or for providing advice in relation to the matters referred to in thisannouncement.ENDROYAL DUTCH SHELL PLCRelated Shares:
RDSA.LRDSB.L