UPDATE 12.50pm: Woodside Petroleum shareholders have blocked the company’s $US2.7 billion ($2.9 billion) plan to buy back most of Royal Dutch Shell’s stake in the company.
Woodside has just released the final voting result, which includes votes cast at this morning’s meeting of shareholders, to confirm widespread expectation that it would fail to receive the necessary 75 per cent support.
The final make-up, which mirrored the flow of proxy votes received ahead of today’s meeting, saw 304.1 million shares, or 72 per cent of the voted stock, lodged in favour of the buyback resolution.
However, 118.8 million votes, or 28 per cent of the total cast, went against the resolution, which means it was not passed and the Shell buyback will not proceed.
It now remains to be seen what Shell does with the 13.6 per cent unwanted stake it retains in Woodside.
It is also unclear whether Woodside and Shell will be able to strike another deal to cut the stake.
Woodside shares were off 64.5 cents, or 1.52 per cent, to $41.875 at 12.50pm.
Earlier at today’s meeting, Woodside chairman Michael Chaney told shareholders if they block the contentious buyback they would see their next dividend cut by 6 per cent.
Speaking to more than 500 shareholders at the Perth Convention and Exhibition Centre, Mr Chaney also bristled at suggestions the deal only benefited Shell.
With proxy votes lodged ahead of today's meeting suggesting the resolution - which needs approval from 75 per cent of votes cast - will be lost, Mr Chaney said it would take a big turnaround to rescue the deal.
He said the final vote would not be available until this afternoon though he conceded "it is likely" the resolution will be blocked.
Speaking to shareholders ahead of the vote, to be carried out by a poll, Mr Chaney said the opposition to the resolution, from shareholders who had cast about 28 per cent of the votes, was dominated by the holdings of three to four investors.
In fact, he said, Woodside thought one of the investors had changed its mind after discussing the buyback with Woodside, only to then reneg and vote against the resolution.
The Australian Shareholders Association, representing 1000 Woodside investors, told the meeting it supported the buyback because it was in the long-term interest of the company and it also appreciated the prospect of higher dividends.
Several shareholders told the meeting they felt the buyback was unfairly in favour of Shell, and called for a broad buyback that all shareholders could participate in.
Mr Chaney repeated his view that opposition to the resolution failed to capture the bigger picture benefit of the deal.
"I don't know how many times I have been asked by investors: ‘What are you going to do about the overhang?’," Mr Chaney said.
"It is not a disaster by any means (that the resolution will be lost).
"We still have the money and we are still focused on shareholder returns and we go forward on that basis."