What impacted the Woodside share price on Friday?

A fair deal failed to excite Woodside investors on Friday…

| More on:
A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Woodside Petroleum share price finished in the red this afternoon
  • It came after shareholders received more information about the proposed merger with the petroleum division of BHP
  • The independent expert report highlighted that KPMG finds the merger to be in the best interests of Woodside shareholders

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%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »