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Shell Oil launches tender offer to Barrett Corp. shareholders

DENVER (AP) — Shell Oil Co. launched a hostile $1.8 billion tender offer Monday for all outstanding shares of oil and gas explorer Barrett Resources Corp., whose board rejected the offer last week.

Shell is taking its $55 per share cash offer directly to Barrett shareholders.

While the price being offered is 24 percent more than Barrett's price of $44.25 per share on Feb. 28, the day before Shell initially proposed an acquisition, it is well below Barrett's price of $62 a share on Monday.

Last week, Denver-based Barrett rejected the unsolicited Shell offer, saying it wanted to seek new offers from other companies.

Walter van de Vijver, president and CEO of Shell Exploration and Production Co. of Houston, said it was a "positive sign that Peter Dea and Barrett's board of directors have said they are considering strategic alternatives, but it is not clear that they are committed to the sale of the company."

"That is why Shell has chosen to take its offer directly to the Barrett shareholders rather than participate in the auction process proposed by Barrett's board. We continue to believe that the best choice is to accept our fully funded cash offer."

Van de Vijver said Barrett's board had not said the $55 offer "is inadequate, so we assume that they and their advisers have concluded that our offer is in an appropriate range."

Shell's tender offer is conditioned upon the company acquiring at least a majority of outstanding shares. The tender offer expires at midnight April 6 unless extended.

Houston-based Shell, a subsidiary of the Royal Dutch/Shell Group, notified Barrett's board of its bid on March 1. Shell offered to assume about $400 million of Barrett debt.

Barrett is involved in gas gathering as well as exploration and production. Most of its properties are in Colorado, Wyoming, Utah, the mid-continent area of Kansas, Oklahoma and in the Gulf of Mexico off Texas and Louisiana.