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Shell to sell part of its Woodside Petroleum stake for $1.7bn

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Woodside's Pluto LNG plant

Shell's subsidiary Shell Energy Holdings Australia Limited has entered into an underwriting agreement with two investment banks for the sale of 64% of its interest in Woodside and 8.5% of the issued capital in Woodside, at a price of A$31.10 per shar.

The desire to split has been mutual, with Woodside happy to remove the overhang that had capped its share price for years, and Shell steadily reducing its stake as part of its global asset sale, which has included Australian refineries and service stations. The announcement came after Perth-based company's stock closed at $32.24. The sale increase was a result of the "strong demand" from institutional investors, Shell said.

Shell said today that proceeds from its sale of Woodside shares will be used to reduce the group's net debt.

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Earlier in the day, Shell said it would sell 71.6 million shares in Woodside for AUD31.10 each for a total consideration of AUD2.20 billion, around USD1.70 billion.

Equity capital markets teams from a number of global banks had been asked earlier on Monday to submit bids and lock in cornerstone investors, a banking source requesting anonymity told Reuters. This was further diluted to 23.08 percent after Shell decided not to participate in Woodside's dividend re-investment program.

Former treasurer Peter Costello blocked Shell's attempted $10 billion takeover of Woodside in 2001 on national interest grounds.

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