Imperial in fresh £1.2bn bid approach
Imperial Energy, the Russia-focused oil company, has had a bid approach that could value the business at around £1.2bn.
India’s state-controlled ONGC appeared to be the most likely bidder, although Imperial’s statement to the London Stock Exchange, confirming an approach had been made, did not identify the would-be bidder.
Shares in Imperial, which earlier this year raised £300m from a rights issue priced at 600p a share, rose 138p to 910p after the statement. Nigel Alves of KPC Peel Hunt said that a successful bid would have to come in at around £12 a share, valuing the group’s proven oil reserves at about $2.50 a barrel. Others, such as UBS and RBS, have price targets of $15 and above.
Alves said ONGC had a strategic interest in securing oil assets. “It has been around trying to do deals and has not had a great deal of success so far,” he said. ONGC has been charged with securing energy resources overseas to fuel India’s booming economy but in this it has been trailing its Chinese rivals.
Imperial Energy earlier this year had difficulty raising debt finance before deciding to go to its shareholders for fresh funds with a heavily discounted rights issue. Some analysts have criticised it for over-investing, leaving itself with more debt than was sensible.
In November 2007 Imperial announced that Gazprombank, the banking arm of Russian gas export monopoly Gazprom, had made an approach to buy a quarter of the company’s equity at a discount to the market price but no deal was agreed.
