OAO RN Holding was poised for the biggest jump on record as OAO Rosneft’s Chief Executive Officer said the oil producer will buy back minority shareholders at a market premium.
Shares surged as much as 18 percent, trading 11 percent higher at 59.90 rubles by 3:49 p.m. in Moscow. The volume of shares was equivalent to 10 times the three-month average.
State-controlled Rosneft will comply “voluntarily” with a government order to buy back the stock, CEO Igor Sechin said today at an investor conference in Sochi, Russia. The price will be set at an 18-month weighted average, which represents a premium of 20 percent to 30 percent to the current market price, he said during a panel led by Prime Minister Dmitry Medvedev. Shares in RN Holding, as the TNK-BP venture was renamed, have gained 12 percent this month through yesterday.
“This is a decent decision,” Stanislav Kopylov, who helps manage about $3 billion, including shares of RN Holding, at UralSib Asset Management in Moscow, said by phone. “We had an idea that a buyout would occur based on the share price gains we saw this month before the decision. The buyout premium is quite conservative considering how much the stock had fallen after the acquisition was announced.”
Rosneft became the world’s biggest publicly traded oil producer by volume in March after it bought TNK-BP, a venture between BP Plc (BP/) and a group of billionaires. Rosneft’s decision not to buy out minority stakes in TNK-BP, followed by moves to borrow from the company and end the dividend policy, sent TNK-BP Holding (TNBP)’s shares tumbling 26 percent on March 26, the most on record.
“It is a good step forward,” Mattias Westman, CEO of Prosperity Capital Management Ltd., which oversees about $4.5 billion of Russian assets, said by e-mail. “We will see what exactly the bid will be.”
Prosperity and investors, including Templeton Emerging Markets Group and Allianz Investments, the asset-management arm of Europe’s biggest insurer, said at the time Rosneft was putting Russia’s reputation at risk.
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