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Shell pauses its $3 billion share purchase ahead of ARC vote

Shell announced?on Friday that it would suspend its $3 billion share-buyback programme until July 14 due to securities law requirements related to its pending $16.4 Billion acquisition of ARC Resources, and the Canadian Company's upcoming shareholders vote.

Shell announced that any shares that are not purchased during the suspension period will be added to the remaining?of its 2026 buyback programs, subjected to board approval. Shell reduced its quarterly share repurchase?programme to $3 billion in May from $3.5 billion, to conserve cash for the balance sheet. This was due to a short-term liquidity squeeze following war-related disruptions to energy supply. Shell announced in April that it would purchase ARC, primarily with shares. In the 'announcement, the British major stated that it would pay ARC shareholders a cash price of?C$8.20 and 0.40247 Shell share for each share. This is around 25% cash plus 75% Shell shares.

ARC announced on Friday that the parties reached an agreement on 6 June to discuss technical issues regarding how C$32.80 per ARC'share will be delivered to ARC Shareholders.

ARC will host a shareholders meeting on 14th July. A minimum of 66% approval is required for the?deal. Shell has made its?largest acquisition since it?purchased gas giant BG back in 2016. Analysts and Shell had predicted that the aging fields of Shell would require an 'acquisition or exploration breakthrough.

ARC's production 'lies near Shell existing Canadian fields' which feeds into the LNG Canada facility, which Shell owns a '40% stake in. Its liquefied gas 'can reach Asian customers more quickly than most other North American LNG.

ARC's production is made up of around 60% natural gases and 40% oil-liquids.

(source: Reuters)