Royal Dutch Shell PLC and private equity firm Blackstone Group LP agreed on working together to jointly bid $10 billion for BHP Billiton Group's US shale assets, Sky News reported March 8.
If successful, the bid would mark the largest takeover Shell has been involved in since its purchase of BG Group in 2016. The shale auction, which includes a number of fields in the Permian Basin, is expected to conclude by 2018. BHP has indicated that it will consider a separate stock market listing for the division if it fails to generate sufficient value from a trade sale, the report said. BHP also noted that it will look at asset swaps as part of the disposal plan.
The planned sale of BHP Billiton's US shale assets was announced August 2017. Investment firm Elliott Management Corp. reportedly urged BHP Billiton to spin off about $22 billion of U.S. oil assets to return capital through buybacks. "Despite the first-class quality of most of BHP's assets, BHP as an investment has underperformed," Elliott said, adding that this has been driven by incomplete restructuring of the group's structure and asset portfolio.
BHP Billiton also recently announced that it plans to open data rooms for its U.S. shale assets in March, as it expects to announce a deal for the sale of the assets before the end of the year.
In its earnings report, the mining giant said trade sale bids for the company's onshore U.S. assets are expected in the June quarter and it will evaluate and negotiate the bids in the September quarter. The joint bid of Shell and Blackstone will only be one of many credible offers for BHP Billiton's US shale assets, Sky News said citing banking sources.
