September 30, 2013 9:53 am

Rosneft makes formal offer for minority investors’ TNK-BP stake

Rosneft made a formal offer to buy out TNK-BP minority shareholders on Monday, six months after it signed a deal to buy out TNK-BP’s main shareholders.

The Russian energy group said it wants to acquire the stake held by minority investors, who own about 5 per cent of TNK-BP holding’s successor RN-Holding, at Rbs67 ($2) per ordinary share and Rbs55 per preferred share. The offer implies Rosneft would spend $1.5bn on the buyout.

Russia’s central bank on Monday said it would review recent trading in RN-Holding for any evidence of suspicious trading ahead of the buyout announcement last Friday.

In the four months ahead of the announcement, RN-Holding’s ordinary shares gained 30 per cent, a rise that roughly charts the movements in Rosneft’s own share price.

However, in the past four weeks leading up to the announcement RN-Holding’s share price jumped 12 per cent. Rosneft’s own stock rose just 6.6 per cent during that period.

Minority investors have signalled that they see Rosneft’s offer as a starting point for negotiation and will continue to fight for a higher price.

State-owned Rosneft bought out TNK-BP’s main shareholders – BP and its four oligarch partners – in a deal valued at $55bn. The four tycoons – Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik – split $28bn between them, implying that the minorities are being bought out at about half the price the billionaire shareholders were.

Until last Friday, Igor Sechin, Rosneft’s chairman, had long insisted that Rosneft had no intention of buying out minorities as it was not legally obliged to under Russian law.

The executive’s stance became a sore point for equity investors in Russia, and one of the reasons cited for Russia’s stock market significantly underperforming emerging market peers during the first five months of the year, around the time that the TNK-BP deal was signed.

Luis Saenz, head of equity and derivatives sales trading at BCS Financial group, said the offer was better than expected but still “not an optimal outcome for minority investors”, adding: “This does not . . . reflect a change in Rosneft’s ‘attitude’ towards minority shareholders.”

Shares in RN-Holding rose as much 6 per cent during Monday trading. Rosneft’s Moscow shares closed 0.6 per cent lower at Rbs263.7.

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