BP Plc’s billionaire partners dropped a planned offer to buy the other half of TNK-BP, their Russian oil venture, after state-run OAO Rosneft dominated the bidding, said a person with knowledge of the decision.
A BP-Rosneft deal looked likely even while the U.K. producer held talks with AAR, which represents the partners, during a 90-day period of “good faith” negotiations between the partners required under the TNK-BP shareholder agreement, the person said, asking not to be identified because the information is private.
Rosneft locked banks into non-conflict agreements when AAR decided last month to expand its bid for BP’s 50 percent of TNK-BP, leaving the group unable to raise funds for a bid by Oct. 17, when the 90-day period ended, the person said.
AAR said last week it may sell its stake in TNK-BP to a third party or in an initial public offering if BP chooses Rosneft as the buyer. The TNK partners have signed a non-binding agreement to sell their stake to Rosneft, Deputy Prime Minister Arkady Dvorkovich said yesterday. AAR declined to comment.
Rosneft Chief Executive Officer Igor Sechin is in London today to hold talks with BP about their deal, two people with knowledge of the plan said yesterday.
The billionaires are still considering an initial public offering of shares in London or New York, the person said.