Retail Shareholder Q&A

Transcription

1 Retail Shareholder Q&A This Q&A contains information derived from, but does not summarise, the announcement of the Offer by Royal Dutch Shell to acquire BG Group dated 8 April 2015 (the Announcement ). This Q&A should not be regarded as a substitute for reading the Announcement nor, once published, the formal scheme document. In the event of any inconsistency between this Q&A and the Announcement or the scheme document, the Announcement (prior to the publication of the scheme document) or the scheme document (once published) shall prevail. I have just received a letter from BG Group about the Offer by Royal Dutch Shell to acquire BG Group what do I need to do? - No action is required at this time, the letter is notification of the announcement of the Offer by Royal Dutch Shell to acquire BG Group made on 8 April The offer requires certain pre-conditions (regulatory approvals) to be satisfied or waived before it will be put to a BG Group shareholder vote. Separately, Royal Dutch Shell shareholders also have to vote on the Offer. - These pre-conditions will take some time with the shareholder votes currently expected towards the end of this year or early Ahead of the shareholder vote, you will receive notice of the shareholder meetings together with appropriate scheme documentation detailing the actions to be taken at that time. This documentation will be sent to you by your chosen preferred method of communication. - Until the Offer completes, the two companies remain independent and you are free to manage your shareholding as you choose. - As a retail shareholder, it is very unlikely you will need to make any additional disclosures under the UK Takeover Code (the threshold is 1% of BG Group shares in issue which is ~34 million shares). What decisions and/or actions will I need to take? - No action is required at this time. - The satisfaction or waiver of the pre-conditions to the Offer from Royal Dutch Shell may take some time and during this period you are unlikely to receive any further information from BG Group regarding the Offer. - Ahead of the shareholder vote, you will receive notice of the shareholder meetings together with appropriate scheme documentation detailing the actions to be taken in due course at that time. This documentation will be sent to you by your chosen preferred method of communication. - Until the Offer completes, the two companies remain independent and you are free to manage your shareholding as you choose. Do I need to disclose my shareholding? - As a retail shareholder, it is very unlikely you will need to make any additional disclosures under the UK Takeover Code (the threshold is 1% of shares in issue which is ~34 million shares). What is the timeline for this transaction and what are the key dates? - Both BG Group and Royal Dutch Shell expect the transaction to close in early Once the regulatory pre-conditions are satisfied or waived, the Offer will be put separately to BG Group and Royal Dutch Shell shareholders for a vote. - The shareholder votes are expected towards the end of this year or in early This means you should expect to receive notice of the shareholder meetings and the appropriate scheme documentation towards the end of 2015 or in early This 1

2 documentation will be sent to you via your preferred method of communication (i.e. website notification, or paper copy). When does the share sale become unconditional? - The offer will become unconditional upon satisfaction or waiver of the pre-conditions and all the other conditions, including the BG Group and Royal Dutch Shell shareholder approvals. How will you be communicating to shareholders? - With respect to the progress of the regulatory approvals required, these will be managed by Royal Dutch Shell. To the extent that Royal Dutch Shell provides any updates on progress, BG Group will release similar information to its shareholders via announcements to the London Stock Exchange which will also be available on our website. - Upon satisfaction or waiver of the pre-conditions, notice of the shareholder meetings and the appropriate scheme documentation detailing the action to be taken by shareholders will be issued to shareholders via their chosen preferred method of communication. - You should expect to receive scheme documentation around the end of 2015 or in early Is there a risk that the Offer does not complete? - The Offer is subject to the satisfaction or waiver of a number of regulatory pre-conditions and other conditions, including approval from both BG Group s and Royal Dutch Shell s shareholders. As a result, there is a risk that the Offer does not complete. When will the scheme documentation be published? - Upon satisfaction or waiver of the pre-conditions, notice of the shareholder meetings and appropriate scheme documentation detailing action to be taken by BG Group shareholders will be issued. - You should expect to receive scheme documentation late this year or in early What are the implications for my BG shares and price? - For each BG Group share owned, shareholders will receive 383 pence in cash and Royal Dutch Shell B Shares. - This valued BG Group shares at 1,350p on the day of the announcement (8 April 2014) based on the 90 day trading volume weighted average price (VWAP) of Shell B shares on 7 April 2014, a c.50% premium to the BG Group share price the day prior to the announcement of the Offer. - BG shareholders will be entitled to receive an interim dividend for the period up to 30 June of not more than 14.38c per share. In addition, should the transaction complete after the record date for Shell s 2015 fourth quarter interim dividend, BG shareholders would be entitled to a further dividend in respect of 2015 of not more than 14.37c per share. If, however, completion occurs prior to the record date for Shell s fourth quarter interim dividend, BG shareholders would receive this Shell dividend (and not a further dividend from BG). - While the offer links BG Group s share price to Shell, until the transaction closes, the two companies remain independent and their shares will continue to trade independently on the relevant stock exchanges. How will BG shares be treated in the event of Shell taking over BG? 2

3 - The Offer is for all BG Group shares. For each BG Group share owned, shareholders will receive 383p in cash and Royal Dutch Shell B shares. - BG Group shares will cease to trade upon completion of the Offer and BG Group will become a subsidiary of Royal Dutch Shell. Royal Dutch Shell shares will continue to be traded on the relevant stock exchanges. When will BG Group shares stop being traded on the stock exchange? - Upon transaction completion which will follow satisfaction or waiver of all the preconditions and conditions, including shareholder approvals and the approval of the Court. - It is expected the timetable to completion will be included in the scheme documentation to be issued once all pre-conditions are satisfied or waived. When will investors be given the opportunity to decide which Shell shares to select and the purchase options as outlined in the documents on your website? - We expect the details on options available to shareholders to be included in the scheme documentation, which will be published once all the pre-conditions are satisfied or waived. - Shell is offering a mix and match election so that BG Group shareholders will be able to elect for more shares or cash. - However, shareholders who elect to receive more cash or shares will only receive the additional cash or shares to the extent that other shareholders make an opposing election of shares or cash. As a result, if such an election is made, there is no certainty over the final mix of shares and cash that a shareholder will receive. - This is not a pure cash or share alternative. Can I ask for all cash or all shares? - Shell is offering a mix and match election so that BG Group shareholders will be able to elect for more shares or cash. - However, shareholders who elect to receive more cash or shares will only receive the additional cash or shares to the extent that other shareholders make an opposing election of shares or cash. As a result, if such an election is made, there is no certainty over the final mix of shares and cash they will receive. - This is not a pure cash or share alternative. Can I receive paper copies of Shell documentation? - Paper copies of the documentation are available on request from Equiniti, BG Group s Share Registrar. - They can also be downloaded or printed from either BG Group or Royal Dutch Shell s website. What will the conversion terms to Shell B shares be if the combination goes ahead? - The offer is for all BG Group shares. Shareholder will receive 383p in cash and Royal Dutch Shell Shares. - This valued BG Group Shares at 1,350p on the day of the announcement (8 April 2014) based on the 90 day trading volume weighted average price (VWAP) of Shell B shares on 7 April 2014, a c.50% premium to the BG Group share price the day prior to the announcement of the Offer. 3

4 - Shareholders will also be given the option to elect to receive the share consideration in Shell A shares if that is their preference. - We expect the details on options available to shareholders to be included in the scheme documentation. When can I expect to receive my cash and new share certificates? - The timetable to completion will be laid out in the Scheme documentation which we intend to send to shareholders within 28 days of all the pre-conditions having been satisfied or waived. - You should expect to receive scheme documentation around the end of 2015 or in early Shareholders will normally have around 4 weeks to review the scheme documentation ahead of the shareholder meetings. - If the shareholder vote approves the transaction, the Company has to return to court to sanction the scheme (the Effective Date). This depends on court availability but is normally 2-4 weeks after shareholder approval at the shareholder meetings. - Under the UK Takeover Code, Shell would need to deliver stock and cash to shareholders within 14 days of the Effective Date. Can I still buy/sell BG shares? - Until the transaction closes, the two companies remain independent and you are free to manage your shareholding as you choose. I don t wish to own shares in Shell what are my options? - Shell is offering a mix and match election so that, BG Group shareholders would be able to elect for more shares or cash. - Shareholders will only receive more shares or cash to the extent there are opposing elections and so there is no certainty over the final consideration mix they will receive - This is not a pure cash or share alternative. - Until the transaction closes, the two companies remain independent and you are free to manage your shareholding as you choose including selling them in the market. - After the transaction closes, you will be free to sell your Shell shares in the market. Would shares purchased after the announcement be given the same or different conversion right to Shell shares? - Until the transaction closes, the two companies remain independent and you are free to manage your shareholding as you chose - The conversion applies to all shares held at the official record date for the scheme of arrangement. - The exact date is not yet known, but both companies expect it to be in early 2016 Are the BG Group Board still committed to looking for a better deal? - The BG Directors have confirmed that they intend unanimously to recommend that BG Shareholders vote in favour of the Scheme, as they have irrevocably undertaken to do in respect of their own beneficial holdings. - If another company was to show interest, the Board has a fiduciary duty to consider any serious alternative on its merits and to change its recommendation if the Board considers 4

5 this to be most likely to promote the success of BG Group for the benefit of its shareholders as a whole. Are there any penalties for BG Group walking away from this deal (e.g. Shell 750m under certain condition)? - There is no break fee payable by BG Group. Will there be a CGT liability on the cash element of the transaction? - We cannot comment on an individual s tax position. - You should seek independent financial advice. If any number of regulators object to this deal what will be the cost to BG Group/Shell? - Both BG Group and Royal Dutch Shell are liable for their own costs associated with the transaction. - In addition, should the board of Royal Dutch Shell withdraw its recommendation of the offer to its shareholders or withdraw the offer as a result of failing to satisfy or wave any precondition or other regulatory condition, Royal Dutch Shell would be liable to pay BG Group 750 million. How does BG Group Board hope to run the business with so much uncertainty surrounding the deal still to be resolved, up to the date on when the deal becomes unconditional? - Until such time as the transaction is finalised, BG remains an independent company, with a committed Board, senior executive and staff who must continue to run the business in a way which promotes the long term success of the Company. - BG Group remains committed to safe operations and delivering its 2015 business plan for shareholders. I have recently received an invitation to buy/sell my BG Group shares. Is this an official service? - BG Group, together with, Equiniti Financial Services Limited (Equiniti) have recently completed a share dealing offering in which shareholders were contacted through the post in order to offer assistance selling any unwanted shareholdings or to buy more shares in the Company. - These Share dealing services were only offered by post and, in conjunction with Equiniti and have now closed. - BG Group is not currently working with any company to provide similar services to its shareholders. - If you are concerned that you have been cold-called by a company offering you any services in relation to your BG Group shareholding please go to the Warning to shareholders section of our website for more information ( or contact the Financial Conduct Authority directly at or Dividends Can I receive dividends by cheque? - Until completion of the Offer, you will continue to be paid your existing dividends by whichever method is currently in place. 5

6 - Please contact Equiniti on if you need to discuss your existing BG Group dividend arrangements. Will I receive Shell dividends in sterling? - We cannot comment on how Royal Dutch Shell will manage its future dividend payments. However, historically Shell has on its class B shares paid by default dividends in sterling, although holders of class B shares have also been able to elect to receive dividends in Euros. Are the regular dividends subject to any withholding? - Both BG Group shares and Shell B shares are currently not subject to any withholding tax. - Dividends paid on Shell A shares have a Dutch source for tax purposes and are currently subject to Dutch withholding tax on dividends. - Further details on the Shell A and B shares are available in para 12 of the 2.7 announcement and on Shell s website and will be provided in any relevant shareholder documentation - Shareholders will also be given the option to elect to receive the share consideration in Shell A shares if that is their preference. US/ADRs What are the tax implications for the US ADR holders? - Unfortunately we cannot comment on individual tax circumstances. - In respect of the schemes overall taxes and fees, we expect the details to be included in the scheme documentation, which will be issued once all pre-conditions are satisfied or waived. Could you please explain how the cancellation of BG s ADRs will work after the Royal Dutch Shell transaction closes? In other words, will the BG ADR holder be required to pay a 1.5% UK Stamp tax or other fees / taxes due to the ADR program being cancelled? - Unfortunately it is too early in the process to be able to provide such specific information. - We expect the details to be included in the scheme documentation, which will be issued once all pre-conditions are satisfied or waived. - That said, typically the ADR holders of the company being acquired receive ADR/ADS in the acquiring company (e.g. Iberdrola / Scottish Power, Lloyds / HBOS, Glaxo Wellcome / SmithKline Beecham). Are there any material differences between holding an ADR vs a BG Group ordinary share at the transaction closing? - ADR holders do not have voting rights, only the shares underlying the ADRs have voting rights. - Typically the ADR holders of the company being acquired receive ADR/ADS in the acquiring company (.g. Iberdrola / Scottish Power, Lloyds / HBOS, Glaxo Wellcome / SmithKline Beecham). - We expect the details to be included in the scheme documentation, which will be issued once all pre-conditions are satisfied or waived. 1 Calls cost 8p per minute plus network charges, lines are open from 8.30am to 5.30pm, Monday to Friday (excluding Public Holidays). 6

7 Is there an ADR conversion fee once the deal closes? - We expect the details on options available to shareholders and ADR holders to be included in the scheme documentation, which will be issued once all pre-conditions are satisfied or waived. Will the 383 pence be delivered in pounds/pence or in dollars? - We expect the scheme document to address this when published. - Based on precedents, typically the bidder will pay the ADR depositary (JP Morgan in the case of BG Group) in GBP and, under the terms of the ADR depositary agreement, the depository will then pay the ADR holders in USD based on the spot rate on the day of receipt. - E.g. Iberdrola / Scottish Power, JT / Gallaher, Kraft / Cadbury. What can BRGYY shareholders expect for each share of BRGYY they currently hold as part of the Shell sale terms? - The same overarching terms apply to ADR holders as to ordinary shareholders (383p cash and Shell shares for each BG Group Share (ADR) held). - For the cash element of the consideration, based on precedents, typically the bidder will pay the ADR depositary (JP Morgan in the case of BG Group) in GBP and, under the terms of the ADR depositary agreement, the depository will then pay the ADR holders in USD based on the spot rate on the day of receipt e.g. Iberdrola / Scottish Power, JT / Gallaher, Kraft / Cadbury. - With respect the share element of the consideration, typically the ADR holders of the company being acquired will receive ADR/ADS in the acquiring company (.g. Iberdrola / Scottish Power, Lloyds / HBOS, Glaxo Wellcome / SmithKline Beecham). - We expect the details to be included in the scheme documentation, which will be issued once all pre-conditions are satisfied or waived. 7