OAO RN Holding jumped to the highest close in seven months as owner OAO Rosneft, Russia’s biggest oil producer, approved buying out minority shareholders.
Shares of RN Holding, formerly TNK-BP, gained as much as 6.8 percent, and traded up 5.4 percent at 63.44 rubles by the close in Moscow, the highest since Feb. 20. The volume of shares was equivalent to about 6.3 times the three-month average.
The oil producer’s board approved a buyout of RN Holding’s minority investors at 67 rubles an ordinary share and 55 rubles a preferred share, Rosneft said today on its website. RN Holding surged 12 percent on Sept. 27, after Rosneft’s Chief Executive Officer Igor Sechin said at an investor conference in Sochi, Russia that the company will comply “voluntarily” with a government order to buy back the stock.
“This situation was resolved quite theatrically,” Aleksei Belkin, who helps manage about $4.4 billion in assets as chief investment officer at Kapital Asset Management LLC in Moscow, said by phone. “Speculators are buying the stock now. I don’t like such things. Life’s too short for games.”
Rosneft became the world’s biggest publicly traded oil producer by volume in March after it bought TNK-BP, a venture between BP Plc and a group of billionaires represented by the AAR Consortium. 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’s shares tumbling 26 percent on March 26, the most on record.
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, Sechin said during a panel led by Prime Minister Dmitry Medvedev on Sept. 27. Shares in RN Holding gained 12 percent this month through Sept. 26 and have plunged 25 percent in the past 12 months.
After using some of the proceeds from the sale of its half to buy more shares, BP ended up with $12.5 billion in cash and 19.75 percent of Rosneft. Rosneft also paid $27.7 billion in cash to AAR. Sberbank CIB analysts estimate Rosneft paid about $3.70 a share, or about 120 rubles a share, to BP and AAR for TNK-BP.
“Minority shareholders who accept the offer will receive just half of the price for their shares that the oligarchs and the big foreign major got for theirs,” Sberbank CIB analysts led by Oleg Maximov, said in an e-mailed note today. “The only shareholders who will benefit from this are speculators who bought the shares on the cheap during the long period of uncertainty.”
Bank Rossii’s financial markets service is reviewing RN Holding’s share price increase prior to Rosneft’s buyout plan announcement, Svetlana Shvetsova, spokeswoman for the government agency, said by phone today. RN Holding gained 8.3 percent from Sept. 24 to 25.