Royal Dutch Shell's A shares rise 1 percent, outperforming a 2.5percent fall for the oil major's B listing, as the firm says it it willresume buying back A shares following the cancellation of a scrip dividendprogramme.
The Anglo Dutch company says future dividends will be settled entirely incash. This will allow Shell to buy back A shares without incurring a Dutchdividend withholding tax, the company says.
Shell's B shares, which are subject to British taxation, have been tradingat a premium of between 8 percent and 9 percent to A shares, Datastream datashows, because they benefitted from the company's buy-back programme.
"Arbitrage between A and B class shares should close quickly," analysts atJefferies write in a note.
They estimate the move effectively increases cash returns to shareholders byabout $5 billion over 2014 and 2015.
"We view the scrapping of the scrip dividend programme as a significant steptowards Shell increasing its return of cash to shareholders," the analystswrite.
Reuters messaging rm://francesco.canepa.thomsonreuters.com@reuters.net