Denver-based Barrett Resources Corp. said Friday it willrecommend that its shareholders reject Royal Dutch/Shell Group’stakeover 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 hostilebid earlier this month, after being rejected in informaldiscussions with Barrett executives (see Daily GPI, March 8).

Barrett CEO Peter A. Dea said that the “board’s position remainsclear and unanimous – we are taking all necessary steps to maximizeshareholder value. The Shell offer is an inadequate attempt to buyBarrett at a price advantageous to Shell and not Barrett’sshareholders.”

When the Barrett board rejected Shell’s offer on March 8, itauthorized management then to pursue “strategic alternatives,”including seeking bids from other qualified parties to buy thecompany. That process is under way, said Barrett, but it did notdisclose whether other offers have come to the table. However, astatement by Barrett Friday said that directors believe “there is areasonable likelihood that the process will yield a superiortransaction.”

Shell Oil. Co., a wholly owned member of Royal Dutch/Shell Groupthat is based in Houston, said it was disappointed with Barrett’srecommendation. In a written statement, Shell said “in its pressrelease, Barrett offered essentially no new factual informationabout its business that had not already been fully factored intoBarrett’s share price prior to Shell’s 24% premium proposal. Shellwill review its future options in light of Barrett’s decision andanticipated filing with the Securities and Exchange Commission.Shell continues to believe that its $55 per share offer representsfull and fair value for the company.”

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