Preferred shares of OAO Bashneft, the oil producer owned by AFK Sistema, plunged to a record low on concern an acquisition by OAO Rosneft may mean no dividend payout for minority shareholders.
The preferred stock dropped 8.2 percent to 954.30 rubles by the close in Moscow, the lowest since the stock’s listing in November 2011. Sistema increased as much as 9.1 percent before closing down 0.2 percent at 27.233 rubles.
State-run Rosneft, the country’s biggest oil producer, may buy Bashneft, Vedomosti reported today, citing people it didn’t identify. Sistema Chairman Vladimir Evtushenkov said he was unaware of the possible purchase when contacted by phone by Bloomberg. Rosneft’s spokesman declined to comment.
“The biggest risk from this speculative acquisition is that Bashneft’s minorities won’t get a payout,” Alexei Yazikov, head of research at Aton Capital LLC, said by phone from Moscow.
Rosneft became the world’s largest publicly traded oil producer by output in March when it bought TNK-BP from BP Plc and a group of billionaires in the country’s largest acquisition. Rosneft’s Chief Executive Officer Igor Sechin proposed last month that the state-run company be accountable for TNK-BP’s dividends starting only from March 21, the day it acquired the venture in the $55 billion deal. OAO TNK-BP Holding has slumped 38 percent over the past 12 months.
“Like TNK-BP, Bashneft pays good dividends,” Yazikov said. “With Rosneft’s arrival, minority shareholders are unlikely to get any cash.”
Sistema’s 87 percent stake is valued at about 320 billion rubles ($9.7 billion) based on today’s market price.
“Without buyback optionality, pref holders are in a much riskier position,” Andrey Gromadin, an analyst at JPMorgan Chase & Co., said in an e-mailed note today. “They should be prepared for a period of uncertainty, similar to TNK-BP Holding minorities, should an acquisition materialize.”