August 27, 2008 Indian Oil Producer Bids for British Rival By REUTERS
LONDON — India’s largest oil producer ONGC has agreed to a £1.4 billion or $2.6 billion takeover of Russia-focused oil explorer, the Imperial Energy Corporation, as it works to secure energy to fuel India’s expanding economy.
Imperial, which is based in London, said on Tuesday that ONGC’s overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares in a deal that could double state-owned ONGC’s proved and probable reserves.
“This is a good price, given consideration for the current softening in oil prices, the turbulence on global stock markets and the geopolitical stage,” analysts at brokerage firm Daniel Steward said in a research note.
But Andrey Gromadin at JPMorgan Chase said a possible rival bid from China could push the price higher.
“We believe 1,250-1,500 pence is highly attractive and represents a best-case scenario for shareholders,” Mr. Gromadin said in a research note.
Imperial shares have risen sharply in recent weeks as investors hoped a bidding war would develop after the company said earlier this month that it had received a second approach from an identified party.
ONGC Videsh already has a presence in Russia through its 20 percent stake in the Exxon Mobil-led Sakhalin-1 oil and gas project, which is locked in a dispute with the Kremlin.
Moscow is blocking the consortium from exporting gas while Exxon says its contract allows the transaction.
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