Gazprom closes in on Sibir as it doubles stake in oil firm

Troubled rival encourages investors to accept offer of 500p pence per share

By Nick Clark

Wednesday, 27 May 2009

Gazprom has moved closer to seizing control of Sibir Energy after its offer to raise its stake in the company was accepted yesterday, valuing Sibir at nearly £2bn.

Sibir's board said it would urge its minority investors to accept the 500p-per-share offer from Gazprom Neft, the Russian energy company's oil business. The move would take Gazprom's holding up to 35 per cent and is likely to spell the end of Sibir's 12-year spell on London's growth market.

Yesterday's announcement added that significant shareholders comprising Bennfield, Central Fuel Company and the Bank of Moscow – which own a combined 40 per cent – have so far been excluded from the offer. Gazprom is expected to push for further control of the group.

The news comes only weeks after Gazprom beat BP's Russian joint venture, TNK-BP, to investing in Sibir. TNK-BP had initially approached Sibir with a 430p-per-share offer for part of the 35 per cent of shares in free float.

Gazprom then came to the table with a higher counter-offer, which prompted TNK-BP to pull out. Gazprom was then clear to pick up 16 per cent of Sibir's shares. TNK-BP is unlikely to have another run at the asset, a spokeswoman said yesterday. "We offered a fair price and we are not going to change that," she said.

Gazprom's 500p-per-share offer values the company at £1.93bn, three times the shares' closing price from its previous trading session in February. Sibir is listed on the Alternative Investment Market, but has been suspended from trading pending an investigation into property dealings involving one of its largest shareholders.

The company has launched a High Court action against a Georgian property tycoon, Chalva Tchigirinski. He has held a 46.7 per cent stake in Sibir with his business partner Igor Kesayev, although there is uncertainty over how much Mr Tchigirinski now owns. Sibir has appointed the solicitors Jones Day and the accountants Ernst & Young to investigate transactions with Mr Tchigirinski in 2008 and aims to recover $400m (£251m) "currently estimated to have been diverted from the company". News emerged in February that Mr Tchigirinski owed Sibir $325m in loans, more than twice the sum that had been publicly disclosed. Sibir had agreed to pay Mr Tchigirinski $157m for two of his development sites in Moscow, and planned to spend a further $340m for eight others.

The shareholders rebelled over the plans, which had been backed by Sibir's chief executive Henry Cameron, and the deal collapsed. Mr Cameron was suspended in the wake of the news.

Sibir added that the money loaned to Mr Tchigirinski could have been used to influence the share price, which sparked the UK's Financial Services Authority investigation of the case.