Thanks for the currency and Woodside losses Pete

Peter Costello has blundered both politically and economically in his decision to block Shell’s move to increase its stake in Woodside Petroleum from 35 per cent to 56 per cent.

Mrs Crikey is a shareholder in Woodside and lost about $145 dollars yesterday on her very modest 100 shares. As we’re expecting our first child in August, we need all the money we can get so we appreciated Shell giving us an offer in of $14.20 a share.

No one else can offer us that because Shell already has 34.3 per cent of Woodside and is not a seller.

And doesn’t the PM look like a right wally now. He comes out and declares the BHP-Billiton deal a “marvellous merger” when it simply serves to give foreigners majority ownership of BHP and a chief executive who will not even be tax-registered in Australia. Furthermore, BHP is paying a 20 per cent premium to Billiton for a bunch of assets in high risk countries.

BHP didn’t seem to care too much about Woodside when they they sold their 40 per cent stake for about $2.60 a share back in 1990. Why didn’t then Treasurer Paul Keating tell BHP that they weren’t allowed to leave Shell as the controlling shareholder with 40 per cent back then? Because in capitalism you shouldn’t stop someone from buying or selling assets from reputable players, provided they don’t exercise too much market power that could see consumers exploited.

And we also appreciate Costello weakening the dollar like that just as we’re sending off a modest contribution to a Crikey cousin in England going on a cancer walk in the Himalayas and we’re paying out $US200 to renew our certificate for taking credit card payments. Thanks a heap Pauline.

These are just two small examples of where Peter Costello is dead wrong to deny us Woodside shareholders a right to receive this offer from Shell. First and foremost this is a shareholder’s rights issue.

Maybe there is a smart lawyer out there who could get a class action up on the question of damages for 43,000 shareholders who are being arbitrarily denied the right to even receive this bid. The shareholders could well have rejected it, but they at least should have the opportunity to assess it. This decision is a gross abuse of shareholders’ rights in Australia.

There is absolutely nothing stopping Shell from using their existing 34.3 per cent stake to vote off the independent directors and gain defacto control of Woodside without paying a cent for it.

Besides, Woodside’s existing board and management should be sacked for the appalling hedging policy they put in place which sees them selling oil for effectively half price. It has literally cost us shareholders billions and now the government is unilaterally preserving this discredited management team.

It is interesting that Woodside’s chairman Charles Goode is a big Liberal Party fundraiser and Woodside’s lobbyist Gary Gray would appear to have earned his seven figure fee along the way.

Crikey’s position on foreign ownership

Crikey is opposed to the BHP-Billiton deal on the grounds of price and is also concerned about the Singtel takeover of Optus on the grounds that a foreign state should not gain control of sensitive communication assets.

Singapore has a repressive government that stymies free speech, political discussion and has appalling privacy policies. These are legitimate concerns for the government in the Optus takeover because Singtel is 78 per cent owned by the Singapore Government and even ASIO and the Defence department are recommending against the deal.

But Shell is a publicly listed oil company with a good reputation, blemishes such as Nigeria and Brent-Spar aside. It has a 100-year history in Australia, is a good employer and the takeover poses no problems on competition grounds.

How can John Howard insist on the Queen of England remaining the Queen of Australia and a representative of the Church of England becoming our Governor-General whilst taking exception to a Dutch-Anglo oil company increasing its stake in Woodside.

This idea that they will somehow hold back development of the North West Shelf is fanciful. There are six equal partners in the project and they simply would not let a Shell controlled Woodside stand on the hose.

And isn’t it ironic that this retrograde decision comes in the same week the Liberals in Canberra, South Australia and the Northern Territory have signed off on their bail out of the crazy Darwin to Alice Springs railway project.

It really is tragic how the Libs are sprinting to the economic left at the moment. The business and shareholding community will have no alternative but to vote for People Power if they want to get some sensible economic policies on offer.

Finally, this is our foreign ownership list which demonstrate Australia’s appalling foreign ownership record. There are only 44 Australian-owned companies generating more than $200 million a year from exports or offshore operations, yet there are almost 200 foreign owned companies turning over more than $200 million a year in the Australian market. We’ve been comprehensively globalised because of excessive union power, incompetent management, big government, a crap tax system, lack of innovation and wrong national priorities on things such as sport and gambling. Additions or corrections for the list are much appreciated.

Australian Companies Generating More Than $200M Overseas

Foreign Companies Generating More Than $200m In Australia Each Year