The secondary listings of shares in London and New York are part of Woodside’s strategy to hold on to the raft of new shareholders that will result from the scrip-based merger deal, in which almost 914.8 million new Woodside shares will be distributed to BHP shareholders as payment for the petroleum business.
UBS analysts led by Melbourne-based Lachlan Shaw estimated about 5 per cent of BHP’s register are overseas shareholders that are ineligible to hold the distributed shares, representing about 47 million of the total new stock to be issued. UBS said the expert’s valuation for the merged company was 8 per cent to 19 per cent below its valuation and the market price.
“Using the IER assumptions, our risked DCF [discounted cash flow valuation] reduces to $29.10 a share, but we don’t think the market is pricing energy stocks based on such conservative assumptions,” Barrenjoey analysts Dale Koenders and Jock Traveerungroj said.