DataRoom AM: Woodside attraction

Shell selling down its Woodside stake has the market abuzz with speculation that another suitor may be waiting in the wings, while Woolworths SA shareholders show their support for the DJs takeover.

A longtime drag on the stock of Woodside Petroleum has finally been removed as Shell yesterday rid itself of most of its 23 per cent stake. But as one former suitor exits the scene, could another emerge?

Elsewhere, the takeover of David Jones clears its second last hurdle, the chase for Ambassador Oil & Gas heats up and Orica weighs the best way forward on a divestment of its non-mining chemical operations.

The majority of Shell’s 23.5 per cent stake in Woodside Petroleum has been hived off, with the former suitor offloading $3.24 billion worth of stock to institutional investors and a further $2.86bn via Woodside buying back its own shares. In all, 19 per cent of its stake will be given up for net proceeds of $6.1bn.

The move comes 13 years after Shell was blocked from buying the Australian energy giant and perhaps could be the precursor to another bid from a global behemoth. The market is abuzz with such speculation, but one doubts the Shell experience will encourage any offshore firms to make a play. It leaves BHP Billiton, long rumoured to be interested in the WA-based firm, as the most likely candidate, but don’t count on it anytime soon.

One takeover that looks likely to move forward is that of David Jones after shareholders of suitor Woolworths delivered an overwhelming show of support for the proposed acquisition, with over 99 per cent of votes cast on the deal in favour. The development leaves a vote of David Jones investors on June 30 as the last hurdle to clear ahead of a planned July 17 execution of the deal.

The main doubt on the merger remains the motives of retail billionaire Solomon Lew, who could now control as much as 12 per cent of the voting stock of DJs, a strong base to scupper the deal.

The race to gain control of Cooper Basin-focussed Ambassador Oil & Gas stepped up another gear yesterday as US-based Magnum Hunter Resources raised its offer by almost 12 per cent in a bid to trump the board-backed bid from Drillsearch Energy.

It’s an uphill battle for Magnum, however, as Drillsearch already has acceptances for about one-third of Ambassador’s stock. Magnum is looking to push over this major hurdle by launching an application to the Takeovers Panel to cancel acceptances already made on the basis they weren’t done in an informed environment.

Also in energy, there are rumours gas group Dart Energy could receive a counteroffer to the $211.5m board-backed bid by IGas Energy. According toThe Australian Financial ReviewUBS has purchased almost 5 per cent of Dart stock in recent weeks, with speculation it could be buying on behalf of another interested party.

Meanwhile, Orica is testing the waters on interest in its $1bn non-mining chemicals division by holding discussions with potential suitors, according to theAFRWesfarmers and Univar are believed to be among a group of six approached by Orica as it assesses whether a demerger or trade sale would be the most profitable exit option.

Finally, Air New Zealand has lifted its stake in Virgin Australia to 25.99 per cent, from 24.46 per cent, to cement its position as the airline’s largest shareholder.

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