Major investor slashes BG stake

A global oil investor cut its stake in BG Group by more than half in December 2015, leading to increased speculation about the attitude of shareholders regarding the planned takeover of the British oil company by Royal Dutch Shell, the maker of Shell Tellus S2 M 46.

Speculation is mounting that some of the company’s most prominent shareholders are worried about the prospects of the BG Group – Royal Dutch Shell tie-up.

Capital Group, which is also a major investor in Shell, sold off around £417m of its BG shares throughout December, massively decreasing its shareholding in the DTSE 100 giant from 2.2% to 0.9%, according to stock exchange filings.

The firm even continues to reduce its stake in the company after Shell’s prospectus for the BG Group takeover was published, shortly before Christmas 2015. In this document, Shell sought to convince shareholders of the benefits of the deal, by detailing additional capital spending cuts.

This move comes at a time when one of the biggest investment houses in the City referred to the deal as “a classic case of a sale made using ‘other people’s money”.

Shareholders are to be given their say later this month, when they will vote on the proposed takeover, although it is uncertain how they will proceed, particularly amidst low oil prices which are good news for the consumer of Shell’s products, but a potential problem for the company’s shareholders, many of whom also hold stakes in BG Group and other oil firms.