Shareholders support India bid

By Gianluca Baratti  |   2009-1-1  |     NEWSPAPER EDITION

IMPERIAL Energy shareholders owning more than 90 percent of the stock of the British-based explorer have backed a 1.4-billion-pound (US$2 billion) bid from India's Oil & Natural Gas Corp.

ONGC's offer attracted support of 96.8 percent of Imperial shareholders by Tuesday's 1pm London time deadline and was declared unconditional yesterday, according to an ONGC statement.

ONGC, the New Delhi-based producer of almost 25 percent of the crude used by Asia's third-largest energy consumer, is seeking to diversify its sources of supplies and keep pace with the country's growing fuel needs. It plans to obtain the equivalent of 60 million metric tons of oil, or one and a half times India's output, from overseas by 2025, Bloomberg News said.

ONGC, India's biggest explorer, said in August it would pay 1,250 pence a share for Imperial Energy. The London-based company, which operates in Russia, had proven reserves of 174.6 million barrels of oil equivalent at the end of 2007, according to its Website, citing an independent audit to Society of Petroleum Engineers standards.

Imperial rose as much as 45 pence, or 3.7 percent, to the bid price of 1,250 pence, the highest since August 26, and traded up 3.6 percent at 1,248 pence at 8:51am London time. Shares will stop trading in London some time after January 29 under the offer terms, ONGC said.

The cash offer for Imperial Energy is 62 percent more than the stock's price on July 11, the day before the company first said it had received a bid.

ONGC fell as much as 15.6 rupees, or 2.3 percent, to 656.3 rupees in Mumbai and was trading down 1.3 percent at 663.35 rupees at 1:52pm local time.

Crude has dropped 67 percent since ONGC offered to buy Imperial Energy in August. The deal would be ONGC's biggest acquisition, giving it access to Russian reserves and securing energy assets overseas to counter dwindling output at home.

Crude traded at US$38.33 at 8:49am London time yesterday, compared with US$116.27 on August 26, when ONGC agreed to buy Imperial Energy.

ONGC Chairman R.S. Sharma said on December 10 there was no change in the Indian company's plans to raise a bridge loan of US$1 billion to fund the purchase.

"Everything is lined up," Sharma said yesterday when asked about the financing plans. "Everything is on track. There are no constraints."