July 18 (Bloomberg) -- BP Plc’s billionaire partners said they will exercise their right to negotiate to buy shares in Russian venture TNK-BP from the U.K. oil producer.
The group representing the billionaires now has 90 days to negotiate with BP, the company said in an e-mailed statement. While BP may talk with other parties during this period, it cannot agree to any potential deal, AAR said.
AAR is seeking half of BP’s 50 percent holding in TNK-BP after the London-based company said in June it was considering exiting the venture after receiving unsolicited proposals to buy its shareholding. That would take AAR’s holdings to 75 percent of the venture. A quarter of TNK-BP has a market value of about $9.4 billion, based on today’s closing of the venture’s listed unit.
“AAR and BP both realize that a fundamental realignment in the ownership of TNK-BP is necessary in order to allow each of the shareholders to achieve its strategic objectives,” AAR Chief Executive Officer Stan Polovets said in the statement. “We hope that BP will now engage with us constructively.”
Today’s notice contained no specific proposal to BP, which will follow later, Polovets said in a separate e-mail.
There’s no guarantee a transaction will take place and a further announcement will be made when appropriate, BP said in a separate statement.
TNK-BP has paid BP $19 billion in dividends since 2003 and accounts for a quarter of the company’s global output. BP Chief Executive Officer Bob Dudley decided to look for a sale after fighting repeatedly with the Russian partners, who last year blocked an alliance between the British company and Russia’s OAO Rosneft.
The existing 50-50 partnership no longer serves the shareholders’ interests, billionaire Mikhail Fridman said May 31 after stepping down as TNK-BP chief executive officer earlier that week.
Fridman traveled to New York and Boston last week to canvas support from BP investors for a deal.
“AAR wanted to provide major BP shareholders with our view of how the current impasse could be resolved,” AAR spokesman Mikhail Luskutov said. “Two scenarios discussed involved AAR buying 25% of TNK-BP from BP and a transaction whereby AAR would swap its stake in TNK-BP for cash and BP shares. Fridman also explained why the status quo can’t continue.”
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