Shell Oil Co. has made an unsolicited $1.8
billion bid for Barrett Resources Corp., a natural gas and oil
exploration firm based in Denver.
Shell, a subsidiary of the Royal Dutch/Shell Group, would also
assume about $400 million of Barrett debt as it tries to establish
a presence in the Rocky Mountains, the company said in a statement
The Houston-based Shell notified Barrett's board March 1 of its
offer to purchase outstanding shares at $55 apiece, a 21 percent
premium over the stock's closing price of $45.62 on Tuesday.
Barrett told Shell its board of directors will consider the
proposal at its regularly scheduled meeting Wednesday and Thursday,
and will respond no later than Friday. A Barrett spokesman did not
return a telephone call Wednesday morning.
Barrett shares rose $14.58, or 32 percent to $60.20 in afternoon
trading Wednesday on the New York Stock Exchange.
In addition to board approval, the offer would be contingent on
Shell acquiring a majority interest in Barrett.
"Shell appreciates the seriousness with which Barrett's board
is approaching our proposal, and we are hopeful that the Barrett
board will respond favorably," said Walter van de Vijver,
president and chief executive officer of Shell Exploration &
Production Co. Shell E&P; is an arm of Shell Oil Co.
In a letter last week to Barrett chairman and chief executive
officer Peter A. Dea, van de Vijver invited Barrett to accept the
offer or negotiate different terms. He also suggested that Shell
would pursue the deal even if Barrett's board votes against it.
"While we would prefer to negotiate and announce a definitive
agreement between our companies in the very near term, we are
prepared to go forward unilaterally by taking our proposal directly
to your shareholders," van de Vijver wrote.
The acquisition would add to Shell's natural gas production
reserves in the resource-rich Rocky Mountain region, where the
company has no presence, van de Vijver said.
Most of Barrett's 200 employees would keep their jobs, he said.
Lehman Bros. is advising Shell on the possible deal.