BUZZ: Shell/BG Spread Narrows after Aussie Approval

Investor confidence in Shell's proposed $70 billion acquisition of BG Group (BRGXF) rose on Thursday after the merger won a key approval from Australian regulators.
 

• The premium of Shell's combined cash and share offer to BG shares narrowed to below 9 percent on Thursday, according to Reuters data. Chart: http://link.reuters.com/qyf54w
  
• The Australian Competition and Consumer Commission (ACCC) earlier gave its unconditional clearance for the deal which will make Shell the world's top liquefied natural gas (LNG) trader and a key offshore oil producer
  
• The merger still requires the green light from Chinese regulator MOFCOM. Shell hopes to complete the deal by early next year
  
• "The Australian approval is good news for the deal, but I would have expected [the spread] to narrow even more. There is still uncertainty about MOFCOM and then there is the shareholder approval," said Niels Lammers van Bueren, senior portfolio manager at TRZ Funds which trades both shares
  
• Spread has been a popular pair trade for merger/arb funds, though the gap between the two share prices has remained relatively static.