Oil prices: The £36bn Royal Dutch Shell-BG Group mega-deal has won more support ahead of crucial vote

Jessica Morris
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Shell has said the deal would work with oil prices in the low $60s (Source: Getty)

Another investor advisory firm has come out in favour of Royal Dutch Shell's £36bn mega-deal with smaller rival BG Group, which goes to a shareholder vote at the end of this month.

British shareholder advisory firm PIRC has advised shareholders to vote in favour of the deal. It comes after Institutional Shareholder Services, a proxy advisory body, recommended investors vote in favour of the deal earlier this week, as did US shareholder adviser Glass Lewis.

The Shell-BG deal came under scrutiny earlier this week when Standard Life said it would vote against the deal using its Shell shares. However, the City investor will be voting in favour of the deal with its 1.3 per cent stake in takeover target BG.

Shell previously said the deal would work with oil prices in the low $60s, however Brent crude fell below the $30 per barrel mark yesterday.

Other shareholders who have thrown their weight behind the deal are Invesco, Allianz Energy fund, AXA Investment Managers and Rathbones.

But Richard Marwood, UK equity fund manager at AXA Investment Managers, a top 20 investor in both companies, previously told City A.M.: “We still think it makes sense to put the companies together, though there is perhaps an argument that the price has swung more in BG’s favour.”

James Maltin, investment director at Rathbones, a shareholder in both companies, also said: “The deal is looking better for BG and less good for Shell, but we think the oil price will rise and the deal will make sense when it does."

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