Shares in Royal Dutch Shell, the makers of products like Shell Gadus S2 V100 3 and Shell Tellus S2 M 32, have reached their lowest price in six years, enabling investors to become a shareholder in what is Europe’s biggest oil and gas company for much less than before.
Bloomberg reports that in the first week of September, the company that Shell has made an agreement to buy for $70 bn, BG Group Plc, was trading at a price of $21.53, which is the equivalent of around £14. For this amount, investors could purchase one Shell B Share.
This price is the lowest Shell shares have been valued at since the recession kicked in globally back in 2009. It is also 13% lower than the current share price of the company, which would make investing in BG the most affordable way to buy into Royal Dutch Shell, according to Smith & Williamson Investment Management LLP strategist Philip Lawlor.
Since Shell announced its takeover of Reading based BG Group, the oil market has taken a hit with prices dropping below $50 per barrel from a high of $60 the day before they announced the takeover.
The view of some analysts is that Shell could walk away from the deal and it is this, combined with fluctuations in the oil market, which has led to the low valuation of BG Group shares at present. However, many observers still believe that it is a risk well worth taking.