Financial Times: Royal Dutch Shell starts trading as single company: "For the first time in its 98-year history, Royal Dutch Shell will trade today as a single, unified company in London...": Wednesday 20 July 2005

For the first time in its 98-year history, Royal Dutch Shell will trade today as a single, unified company in London after 91 per cent of investors in Royal Dutch agreed to tender their old shares.

The company needed 95 per cent of Dutch shareholders to agree to the offer but it was able to invoke a clause allowing approval at lower levels.

The High Court also sanctioned the scheme of arrangement yesterday, the final step before a formal listing.

The new shares will also trade on Euronext Amsterdam and as American Depositary Receipts in New York.

News of the company's reorganisation even hit sterling, as the final unification of the two parent companies sparked strong demand for euros from UK fund managers.

Shell shares have risen more than 20 per cent in London since the plan to combine the UK and Dutch companies was announced last October, as fund managers rebalanced portfolios to reflect the new company's weighting in the FTSE 100 share index.

A Merrill Lynch survey of the UK's top 50 fund managers, published in June, showed their holdings to be still far below the level required to hold a market weighting in the £127.5bn combined group.

However, shares in Shell Transport & Trading, the UK arm, fell 9p to 528p, with many active fund managers saying they were unhappy about the state of Shell's underlying business.

Several worried about the effect of last week's news that its flagship Russian gas project Sakhalin-2, was behind schedule and $10bn (£5.7bn) over budget.

The Royal Dutch Shell 'A' share, which started trading in London last Friday, has also been under pressure, falling from £18.35 at last Friday's close to £18.24½ yesterday. Andrew Freyre-Sanders, vice-president of global execution services at JPMorgan, said: "Although there has been significant positive demand for the stock, a willingness by other market participants to sell into this demand could cap any positive impact on the price."

The company now will be able to use its new shares as currency to mount takeovers far more easily. However, Jeroen van der Veer, Shell chief executive, said in an interview that large acquisitions remained too expensive at current oil prices and it was hard to see they created shareholder value.

The company has said it would focus on smaller acquisitions of up to $9bn and asset swaps, such as that agreed this month with Gazprom, Russia's state-run gas monopoly.

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