Barrett Urges Shareholders to Reject Shell's Bid
Denver-based Barrett Resources Corp. said Friday it will recommend that its shareholders reject Royal Dutch/Shell Group's takeover bid, calling the $55 per share cash tender offer "inadequate and not in the (company's) best interests." Shell, eager to enter the gas-rich Rocky Mountains, launched its hostile bid earlier this month, after being rejected in informal discussions with Barrett executives (see NGI, March 12).
Barrett CEO Peter A. Dea said that the "board's position remains clear and unanimous --- we are taking all necessary steps to maximize shareholder value. The Shell offer is an inadequate attempt to buy Barrett at a price advantageous to Shell and not Barrett's shareholders."
When the Barrett board rejected Shell's offer on March 8, it authorized managed then to pursue "strategic alternatives," including seeking bids from other qualified parties to buy the company. That process is under way, said Barrett, but it did not disclose whether other offers have come to the table. However, a statement by Barrett Friday said that directors believe "there is a reasonable likelihood that the process will yield a superior transaction."
Shell Oil. Co., a wholly owned member of Royal Dutch/Shell Group that is based in Houston, said it was disappointed with Barrett's recommendation. In a written statement, Shell said "in its press release, Barrett offered essentially no new factual information about its business that had not already been fully factored into Barrett's share price prior to Shell's 24% premium proposal. Shell will review its future options in light of Barrett's decision and anticipated filing with the Securities and Exchange Commission. Shell continues to believe that its $55 per share offer represents full and fair value for the company."
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