Daily Mail (UK): Now Shell spells out swap deal: SHELL shareholders have some reading to do as the oil group sends out documents on welding its two companies Royal Dutch Petroleum and Shell Transport into a single, £120bn giant called Royal Dutch Shell…”: “The huge move is sparked by last year's reserve scandal.” (ShellNews.net) 28 May 05

CITY INVESTMENT

Saturday, May 28, 2005

SHELL shareholders have some reading to do as the oil group sends out documents on welding its two companies Royal Dutch Petroleum and Shell Transport into a single, £120bn giant called Royal Dutch Shell (RDS).

You need to get your vote back to Shell by June 26. That means filling in a proxy form for the agm on June 28 (you can still turn up at the ExCel Centre in London Docklands on the day).

Most UK holders have Shell Transport shares. Shell gives an example of how their holding changes, based on midweek's share price of 470p. For each share held, you get roughly 0.287 B shares in RDS. If you had 100 Shell shares, worth £470, you would get 28 RDS B shares. If these trade at £16.36 each, your holding would be worth £458.08. Shell would send you a cheque for the remaining £11.92.

Why such a 'heavy' share price? Shell explains that it wanted to strike a balance between the old Royal Dutch shares, which traded at £33, and the Shell shares at 470p. But not every investor wants shares that cost £16. The good news is that you don't have to send in your share certificate -just your blue and pink proxy voting forms.

If unification is approved, shortly after July 20 you will get a letter telling you how many new RDS shares you hold. The share register will be electronic, so you won't get a paper share certificate unless you request one.

Shell says you should not be liable for capital gains tax, and that 'generally' investors should have no tax liability from the change. The huge move is sparked by last year's reserve scandal.

Shell believes the new structure will be simpler, cleaner and more effective. The new shares will have a huge weighting in the Footsie 100, which means index tracking funds need lots of them.

Dividends on B shares will be paid quarterly in sterling, unless you fill in the form requesting them in euros instead. Don't all rush! Shell's call centre for shareholder queries is 0800169 1679, open Monday to Friday from 8.30 am to 5.30pm.

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