Financial Times: Chief's departure blow to Shell LPG auction: “The €2.5bn ($3bn) auction of Royal Dutch Shell's liquefied petroleum gas business has suffered a setback after the unexpected departure of the division's chief executive.”: Thursday 13 October 2005

By Peter Smith in London

Published: October 13 2005

The €2.5bn ($3bn) auction of Royal Dutch Shell's liquefied petroleum gas business has suffered a setback after the unexpected departure of the division's chief executive.

Shell yesterday confirmed that Mike Treanor, head of the unit, had stepped aside and would be replaced by Charles Harrison.

"It was a mutual decision," said Shell, adding Mr Treanor would be staying with the group for an interim period.

It is understood Mr Harrison, a Shell veteran with knowledge of the LPG sector, would be prepared to move with the unit upon its sale.

UK and Polish authorities have targeted the LPG sector amid concerns about anti-competitive pricing. The UK's Competition Commission recently found evidence that households were being overcharged because of limited competition.

After reporting provisional findings in August, the commission is due to publish its final report early next year.

Six bidders remain in the running to buy the business, which is still in a first round in spite of the auction kicking off at the start of the year. They are BC Partners of the UK; PAI of France together with Bain Capital; Kohlberg Kravis Roberts with Goldman Sachs Capital Partners; Cinven in partnership with Ultragaz, the Brazilian gas company; and CVC Capital and Repsol, the energy group.

International Petroleum Investment, based in Abu Dhabi, is also interested. Blackstone, which had earlier teamed with Eurazeo of France, is thought to have dropped out.

The business appears likely to end up in the hands of a private equity group or buy-out team linked with a strategic partner. "It's been a very long first round. Hopefully, it will go to a second round next month," said a person involved in the auction.

Shell last night said the timetable had not slipped.

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