THE LONDON TIMES: Buyout firm is latest suitor for Shell's liquefied gas arm: “BC PARTNERS, the buyout group, yesterday emerged as the latest suitor for Royal Dutch/Shell’s liquefied petroleum gas business, which is expected to be sold for up to $3 billion (£1.6 billion), The Times has learnt.” (ShellNews.net) 25 Jan 05
By Tom Bawden
January 25, 2005
BC PARTNERS, the buyout group, yesterday emerged as the latest suitor for Royal Dutch/Shell’s liquefied petroleum gas business, which is expected to be sold for up to $3 billion (£1.6 billion), The Times has learnt.
The buyout group, which is best known as the controller of Baxi, Britain’s biggest boilermaker, and home to the Bermuda range of gas-powered coal and log fires, unwittingly kick-started the “stategic review” of the liquefied petroleum gas (LPG) company when it made an approach for the business in September.
BC Partners is still interested in the LPG market and is working on an offer for the business, which is expected to be formally put up for sale in the next three months.
The buyout firm is very keen to buy a gas company after missing out in the auction to buy Antargaz, the French gas distributor, in 2001.
BC Partners will face fierce competition for the maker of gas that can be used to fuel ovens, fridges and barbecues, as well as to power vehicles and heaters.
The financial buyers, Texas Pacific Group, Bain Capital, Blackstone Group, JP Morgan Partners, Kohlberg, Kravis, Roberts, and Goldman Sachs, have also made approaches to Shell.
The LPG company, which made earnings before interest, tax, depreciation and amortisation of $400 million in 2003, employs 4,000 staff and is led by Rob Routs, a managing director of the Shell group.
Shell aims to sell up to $12 billion of peripheral businesses to help to finance $45 billion of capital investment over the next three years as it seeks to boost its stagnant exploration and production operation.
The disposals include the sale of Basell, the plastics joint venture that Shell owns with BASF, the German chemicals company.
Basell, which could fetch about $5 billion, is being fought over by Iran’s National Petrochemical, PetroChina, the Chinese oil company, and a consortium of US buyout firms.
The consortium comprises Blackstone Group, Bain Capital, Apollo Management and Goldman Sachs Capital Partners.
Shell’s LPG unit is headquartered in London and sells four million tons of liquefied gas a year to about 50 countries, giving it a 3 per cent share of the global market.
Shell was forced to reduce the number of its reported proved oil reserves by nearly a third last year, through five downgrades, leaving it with about 13.5 billion barrels.
The oil giant also gave warning that there could be a further downgrade because it was only about 60 per cent of the way through auditing its reserves, using its more thorough revised guidelines.
Shell is replacing its century-old dual ownership structure with a single company, in an attempt to convince the City that the failures of communication that led to the overstatement of reserves will not happen again.