Mark Mobius, chairman of Templeton Emerging Markets Group, said Russian President Vladimir Putin’s comments to OAO RN Holding minority shareholders were “very positive” as they dispute a buyout offer made by OAO Rosneft.
The government won’t let Rosneft violate the rights of smaller investors and take away their property at a price that doesn’t correspond to the market, Putin said on Moscow on Oct. 2, in response to questions from Templeton Vice President Artem Litvinov as to whether Rosneft’s offer is fair.
State-run Rosneft said last month it will buy stock at a premium from minority investors in the former TNK-BP Holding, which it acquired in a $55 billion cash-and-share deal from BP Plc and a group of billionaires represented by the AAR Consortium. The Moscow-based oil producer’s board approved a buyout at 67 rubles an ordinary share and 55 rubles for preferred shares in the traded unit of the TNK-BP venture, Rosneft said Sept. 30. Sberbank CIB analysts said the offer was “disappointing” for investors, as they estimated Rosneft paid about $3.70 a share, or about 120 rubles a share, to BP and AAR.
“We would like to thank President Putin for his remarks last Wednesday supporting minority shareholder rights,” Mobius said in an e-mailed comment to Bloomberg News. “We feel this is very positive indeed.”
Templeton’s criticism of the offer price was an “attempt to manipulate the market,” Rosneft Chief Executive Officer Igor Sechin said on Oct. 5. “What does it mean fair price or not fair price?,” he said that day.
“In terms of reaching a fair price, there are a number of external studies that we think will help Rosneft determine the right price,” Mobius said in the e-mail, without elaborating.
Rosneft’s initial decision not to buy out minority stakes in TNK-BP Holding, followed by moves to borrow from the company and end the dividend policy, sent its shares tumbling 26 percent on March 26, the most on record.
Rosneft’s treatment of minorities was “very instructive,” Mobius said on April 18 at an investment forum in Moscow. “You have oligarchs leave with billions of dollars, while minority investors are now sitting in a very risky, unstable situation.”