TNK-BP Bids for Minority Sibir Stake

TNK-BP began a blitz bid Wednesday to buy a minority stake in smaller rival Sibir Energy, offering an impressive £4.30 per share, 2 1/2 times more than its last closing price. Credit Suisse International said it was ready to buy a "significant minority stake" in the company on behalf of TNK-BP until Thursday. TNK-BP, the country's third-largest oil producer, may gain up to 35 percent of Sibir Energy -- all that is not owned by two private Russian shareholders and the Moscow city government. It is unusual for a major oil company like TNK-BP, half owned by BP, to settle for the role of a minority shareholder unless it hopes to build up the stake to gain control of the company later. "TNK-BP ... has not reached any agreement to acquire shares from the controlling shareholders," Credit Suisse said in a statement that announced the bid Wednesday afternoon. The bank set the purchase price at £4.30 ($6.26) a share, valuing the entire London-listed company with assets in Russia at $2.4 billion. TNK-BP may end up paying as much as $842 million for 35 percent of Sibir Energy, said Svetlana Grizan, an analyst at VTB. Sibir Energy said TNK-BP had not approached the company to discuss a stake purchase. Another company, however, was interested in possibly making an offer for Sibir, Sibir said in a statement, without identifying the company. "Discussions with that party are at a very preliminary stage, and there can be no guarantee that an offer for Sibir will be forthcoming," it said. State-owned Rosneft has contacted Sibir to discuss a potential bid for the company, The Times of London reported Monday. A TNK-BP spokeswoman declined to comment, but a BP spokesman said his company supported the bid. "We are quite behind TNK-BP on this sort of activity," spokesman Toby Odone said. "We have a good track record in Russia, and we are very keen to deepen our investment." Sibir suspended trading in its shares in February after it learned that one of its major shareholders, Shalva Chigirinsky, owed the company $325 million. Sibir sued Chigirinsky and former chief executive Henry Cameron to recover "funds that were taken from the company," it said earlier this month. The company has a 50-50 oil-producing venture with Royal Dutch Shell in Siberia, owns a refinery in Moscow jointly with Gazprom Neft, an oil arm of Gazprom, and runs filling stations. Chigirinsky and another Russian businessman, Igor Kesayev, each own slightly more than 23 percent of Sibir, but Sberbank now holds their stakes as collateral for loans. The Moscow city government holds 18 percent of the oil company. TNK-BP is likely betting that it will be able to acquire a controlling stake at some point, Grizan said. "The most unusual thing is that TNK-BP agreed to a minority stake," she said. "They are probably hoping to buy out either Chigirinsky's or Kesayev's stake afterward."