Daily Telegraph: Shell may split bottled gas business: “Shell, the oil major, is now considering splitting its bottled gas business in separate packages because of a lack of interest in the auction of the unit.”: Monday 16 January 2006

By Malcolm Moore (Filed: 16/01/2006)

Shell, the oil major, is now considering splitting its bottled gas business in separate packages because of a lack of interest in the auction of the unit.

The Liquified Petroleum Gas business has been on the block for more than a year, and at least nine bidders have dropped out of the running. Only two are left: Repsol, the Spanish oil company, and BC Capital, a private equity house.

When Shell started the auction, it wanted €2.5billion (£1.7billion), but the price has now dropped after a profits warning from the French division of the business. Shell may now split the unit up and sell the French business separately.

Shell would not comment on what proportion of the overall business France makes up, but a spokesman said it was "a large chunk". France is believed to contribute a substantial part of the revenues, but has limited scope for growth.

Overall, the bottled gas business, which provides fuel for heating and vehicle fuel, has underlying earnings of €200m a year. The gas is popular in rural areas, and is also often used to fire outdoor heaters.

A spokesman for Shell said the auction has now progressed to the next round, and that unsuccessful bidders have been notified. The venture capital consortium of Bain and PAI Partners has dropped out.

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