* Fridman seeks way out of shareholder impasse
* “Preferred option” for BP to buy out oligarchs’ stake –
AAR
* Billionaires confident of Russian govt support for sale to
BP – source
* If BP determined to sell, AAR says willing to buy 25 pct
stake
By Douglas Busvine
MOSCOW, July 16 (Reuters) – The billionaire co-owners of
Anglo-Russian oil venture TNK-BP would be willing to
sell their stake to British oil major BP for cash and
stock to put an end to a bitter shareholder conflict.
That was the position presented by Mikhail Fridman, one of
the quartet of investors who own half of Russia’s third-largest
oil company through the AAR consortium, to meetings in New York
and Boston with large institutions that own BP stock.
“The message Mikhail Fridman delivered was that the
partnership in its current form has run its course,” AAR CEO
Stan Polovets said on Sunday of the meetings this past week,
which followed up on a series investor briefings in London in
June.
“The shareholders need to find a way to realign ownership
interests and eliminate the internal contradictions that are
tearing TNK-BP apart.”
Shareholder relations, which have often been rocky at TNK-BP
since BP came in as an equal partner in 2003, worsened last year
when the British major tried to reach a strategic alliance with
state-controlled Russian oil major Rosneft.
AAR blocked the deal in the courts, successfully arguing
that it violated an exclusivity clause in the TNK-BP
shareholders’ agreement. The ensuing fallout has left the
company without a board quorum, blocking dividend payments.
Fridman quit in May as CEO and BP at the start of June put its
stake up for sale.
Under a timeline set by the shareholder pact, AAR has until
the end of this week to express its interest in buying BP’s
stake. BP can negotiate with other interested parties but cannot
do a deal with them for a further 90 days.
AAR will submit an expression of interest on July 19,
Polovets said. It would be willing to buy one-half of BP’s stake
in TNK-BP – or a 25 percent stake – at a current market price of
around $10 billion.
But AAR’s preferred option would be to exchange its stake in
TNK-BP for cash and a stake of 10-12 percent in BP. “It would
make more sense for all parties involved,” Polovets told
Reuters.
Such a deal would release BP from the obligations under the
TNK-BP shareholders’ agreement barring it from partnering with
other companies in Russia, such as Rosneft and gas export
monopoly Gazprom, Polovets added.
At the same time, it would provide AAR with diversification,
liquidity and a long-term exit strategy.
“Our objective is to be shareholders in a global company. We
want to have liquidity and an exit strategy,” Polovets said by
telephone from New York.
The reaction of the BP shareholders to the idea that the
British major buy out AAR from TNK-BP for cash and stock was
“much more positive” than for AAR’s own proposal to buy 25
percent of TNK-BP.
“Most shareholders had no concerns about AAR being a
significant shareholder in BP,” Polovets said, adding that AAR
would not seek board representation and would be prepared to
accept a lockup agreement to avoid putting pressure on the
stock.
INFORMAL SUPPORT
Sources close to the Russian consortium say AAR has received
informal indications from the Russian government that it would
support a deal that hands outright control of TNK-BP to BP.
“AAR would not propose such a transaction if it were not
confident of government support for a transaction through which
BP would gain 100 percent control of TNK-BP,” the source said.
Polovets indicated that AAR was not proposing that a share
swap take place immediately.
“Such a deal could be structured to take effect over a
period of five to seven years, during which AAR would continue
to manage TNK-BP and help expand the company through
relationships with Rosneft and Gazprom,” he added.
“In the meantime, the management of BP could focus on
stabilizing its operations elsewhere and grow its business
outside of Russia so that the Russian barrels don’t represent
such a high percentage of BP’s reserves and production.”
At the same time, AAR has reiterated its readiness to buy
half of BP’s stake in TNK-BP should BP be determined to divest.
“We are confident that BP will not receive any serious
offers for its stake in TNK-BP; we are the only serious buyers,”
Polovets said, noting that BP had not asked AAR for permission
to provide confidential data on TNK-BP to a prospective buyer in
the six weeks since BP announced that it received an indication
of interest from potential buyers.
Although AAR has not yet sought financing for its potential
buyout of BP’s 25 percent stake in TNK-BP, Polovets said the
group had received unsolicited offers for financing of a
possible deal from several major banks.
“We are holding off on the financing conversation. We want
to get a deal with BP first,” Polovets said.
(Reporting by Douglas Busvine; Editing by Matt Driskill)
