Financial Times: Shell shock: “Italian investors holding nearly €1bn worth of Royal Dutch and Shell Transport shares will be unable to take part in the oil major's ground-breaking corporate unification by exchanging their current holdings into new Royal Dutch Shell shares.” Thursday 14 July 2005

By Paul Betts

Published: July 14 2005

So much for the Schengen border-free zone and European financial harmonisation. Regulatory hurdles are blocking investors domiciled not only in the US, Japan and New Zealand, but also in Italy, from participating in one of the year's biggest share offers.

Italian investors holding nearly €1bn worth of Royal Dutch and Shell Transport shares will be unable to take part in the oil major's ground-breaking corporate unification by exchanging their current holdings into new Royal Dutch Shell shares.

The Anglo-Dutch oil group is due to complete the merger of its two existing companies next week, with the primary listing of the new unified company's shares making their debut in London.

Italians are being excluded because, it appears, the group was not prepared to undergo all the red-tape hassle and costs of getting its offer documents approved by the Italian regulator.

Italy still insists that foreign prospectuses and other documents are translated into Italian.

The documents must also undergo separate scrutiny by the Italian regulator.

Consob, the Italian stock market watchdog, seems surprised by the fuss. Apparently, the regulator was never contacted.

It also claims the cost for gaining Italian regulatory approval for a prospectus is not excessive compared with other European jurisdictions.

Whatever the arguments, common European rules would have avoided the problem. Instead, Italian investors will have to sell their existing shares and buy the new ones, paying all the usual brokerage and transaction costs.

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