The Woodside Petroleum Limited (ASX: WPL) share price took a ride to the downside this afternoon. This followed the release of a presentation to Woodside shareholders covering details of the proposed merger with the petroleum division of BHP Group Ltd (ASX: BHP).
At the final bell, the oil and gas company's shares were 1.52% lower to $32.40. Woodside's shares recently hit a new 52-week high of $34.60 but it seems there wasn't enough information in today's presentation to keep the momentum going.
Independent review says the deal is fair
A swarm of materials pertaining to Woodside's tie-up with the petroleum business of BHP landed in the lap of investors on Friday afternoon. The information has been provided to shareholders to assist with informing their decision as the shareholders vote on the merger approaches.
For reference, the shareholder vote is slated for 19 May 2022 at the annual general meeting. This would be nine months after the original merger confirmation made by Woodside last year.
Turning back to today's presentation, a few notable items were included. Importantly, the independent expert report highlighted that KPMG finds the merger to be in the best interests of Woodside shareholders. Yet, this appears to not have done much for the Woodside share price today.
Additionally, the presentation outlined a potential $400 million in estimated annual synergies. In terms of production, the combined entity would be looking at around 193 million barrels of oil equivalent. The newly created energy dominance would position the company as a top 10 global oil and gas producer.
Outlining their findings, KPMG stated:
Whilst there are various factors that may not be attractive to Woodside shareholders, the benefits of holding a share in the merged group are sufficient to conclude that Woodside shareholders will be, on balance, better off by approving the proposed transition,
What's next on the timeline for the Woodside share price?
From here, shareholders will convene on 19 May to make their decision on the merger. It will be on this date when the market will find out whether all the planning results in an official deal.
Finally, if shareholders vote in favour of the merger the next event will be the implementation date. Based on the presentation, this will occur on 1 June, which will see the distribution of new Woodside shares to BHP shareholders.
The Woodside Petroleum share price is up around 43% since the beginning of the year. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 1.5%.
