TNK-BP Billionaires Said to Reject $27 Billion BP Buyout Offer

BP Plc (BP/)’s billionaire partners in TNK-BP rejected a $27 billion buyout offer as the U.K. explorer struggles to hold together a plan to collaborate with another Russian oil producer, according to a person with knowledge of the proposal.

The billionaires went to court to block London-based BP’s agreement for a share swap and Arctic exploration partnership with OAO Rosneft because they said TNK-BP has exclusive rights under its shareholders’ agreement to pursue opportunities in Russia for BP. An arbitration panel had allowed BP to seek an extension of the swap agreement, which expires today.

BP’s buyout bid was made this week to AAR Consortium, which represents the billionaires who own half of TNK-BP, and swiftly rejected because the group didn’t consider the offer to be serious, said the person, who is close to TNK-BP management. The person asked not to be identified because the details haven’t been publicly disclosed by the companies involved.

BP agreed on January 14 to swap a 5 percent stake for 9.5 percent of Rosneft and explore for Arctic offshore resources under an alliance that Prime Minister Vladimir Putin said may “have a noticeable impact on the global oil and gas industry.”

BP and Rosneft have been in consultations as the deal nears the expiration deadline, said Rustam Kazharov, a spokesman for the Russian state-controlled oil company.

Rosneft and BP may extend by a month the deadline to complete their share swap, the Vedomosti Russian newspaper reported today, citing unidentified people familiar with the matter at both companies. An extension would give the companies more time to negotiate a buyout agreement with the TNK-BP partners, the newspaper reported.

Daren Beaudo, a spokeswoman for BP based in Houston, declined to comment. The rejected offer was earlier reported by the Financial Times and SkyTV.

To contact the reporter on this story: Torrey Clark in Moscow at tclark8@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net