Shareholders of Canadian natural gas producer ARC Resources (ARX) said that its shareholders have voted in favor of being acquired by oil major Shell (SHEL).
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The shareholder approval clears a major hurdle for the $16.4 billion takeover, which is one of this year’s biggest deals in the global energy sector. Shell has agreed to acquire ARC Resources as it seeks to grow its natural gas portfolio in North America.
In a news release, ARC Resources said that 99.54% of votes cast at a special shareholder meeting supported the takeover by Shell. The deal, which is expected to close later this year, is still subject to regulatory approvals, although it has obtained approval from competition agencies in Canada and the United States.
Oil Markets Gyrate
News that Shell’s purchase of ARC Resources is proceeding comes as oil prices gyrate wildly. Crude prices are back above $80 a barrel as the U.S. and Iran exchange missile fire and the Strait of Hormuz shipping lane near Iran is again closed.
Brent crude oil, the international standard, is up 2% on July 14 and trading near $85 a barrel as tensions in the Middle East flare and the outlook for oil shipments remains uncertain. West Teas Intermediate (WTI) crude oil is trading at just under $80 per barrel. Prices are off their highs after U.S. President Donald Trump backed down on his threat to impose a toll on ships transiting the Strait of Hormuz.
Is SHEL Stock a Buy?
The stock of Shell has a consensus Moderate Buy rating among seven Wall Street analysts. That rating is based on three Buy and four Hold recommendations issued in the last three months. The average SHEL price target of $108.73 implies 29% upside from current levels.
