Royal Dutch Shell today lit the fuse on its $1.8 billion hostile bid for US gas producer Barrett Resources, ignoring market suggestions it would need to bid higher.
Barrett's board rejected informal approaches from Shell earlier this year and last week rebuffed a written ultimatum that showed just how keen it was to get control of Barrett's key Rocky Mountain natural gas reserves.
Shell struck from its Houston US headquarters at dawn, carrying out its threat with a tender offer made directly to Barrett's shareholders. The bid is backed with the billions of petrodollars that make Shell the world's second largest oil company and more than 100 times larger than Barrett.
Shell's aim is to grab what it sees as a strategically important position in the United States' second largest natural gas basin as the country increasingly turns to the energy source for its power needs.
Barrett said it will invite other energy companies to make competing bids. With its $400 million of debt, Shell's $55 a share offer puts an enterprise value of $2.2 billion on Barrett.