Rosneft Said to Gain Right to Squeeze Out TNK-BP Minorities

OAO Rosneft is set to gain more than 95 percent of RN Holding, formerly the traded unit of TNK-BP, beyond the threshhold allowing it to squeeze out minority investors, according to a person with knowledge of the matter.

Owners of more than 10 percent of RN Holding agreed to tender their stock, giving Russia’s largest oil company enough control to compel the rest of the unit’s shareholders to sell, according to the person, who asked not to be identified because the information isn’t public. The shares tendered included a 9.989 percent stake that state-run Rosneft sold in October, the person said.

Templeton Emerging Markets Group and Prosperity Capital Management had criticized Rosneft’s offer price, set in September, for being lower than what it paid London-based BP Plc and a group of billionaires for TNK-BP, Russia’s third-largest oil producer. While RN Holding shares have gained since then, they remain below the level Rosneft will pay.

“If the 10 percent was transferred back to or somehow consolidated by Rosneft, it’s game over,” Anton Panchenkov, a Moscow-based lawyer at Goltsblat BLP LLP, said today by phone. “The next step should be a squeeze out of all the minorities.”

Rosneft will pay shareholders no later than Feb. 19, according to a website statement marking the end of the offer today. Rosneft’s press office declined to elaborate.

Russian companies have the right to make a mandatory buyout offer if they consolidate a stake of more than 95 percent. Rosneft said Nov. 6 that it may consider delisting RN Holding if its stake exceeds that threshold.

Templeton sold its stake in RN Holding, Chairman Mark Mobius said in November, while Prosperity declined to comment on its holdings.

RN Holding shares fell 32 percent from Oct. 19, 2012, the day before the acquisition of TNK-BP was announced to Sept. 26, 2013, the day before the board approved a priced of 67 rubles a common share and 55 rubles a preferred share.

The stock fell 0.7 percent to 65.01 rubles today.

Rosneft sold 9.989 percent in RN Holding for 97 billion rubles ($2.9 billion) to undisclosed third parties, the company said in October. It controlled 94.67 percent of RN Holding’s share capital before its October deal.

Before it's here, it's on the Bloomberg Terminal.