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09:34 GMT +3 hours20 December 2014
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AAR May Hold IPO After BP Stake Buy

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BP’s Russian billionaire partners in TNK-BP may hold an initial public offering (IPO), if they repurchase the British oil major’s entire 50 percent stake in the joint venture, TNK-BP Executive Director German Khan said on Thursday.

BP’s Russian billionaire partners in TNK-BP may hold an initial public offering (IPO), if they repurchase the British oil major’s entire 50 percent stake in the joint venture, TNK-BP Executive Director German Khan said on Thursday.

“We must make an offer to BP by October 17 when the 90-day negotiation period expires. A final decision on the value of the BP stake has not yet been made but it any case, it will be competitive,” he said.

“After consolidating the TNK-BP share package, AAR may with time consider various options, including an IPO or a new strategic partner,” he said.

The Alfa Access-Renova (AAR) consortium of four Russian shareholders, which holds a 50 percent stake in TNK-BP, announced last week it intended to make a new offer to BP to repurchase its entire 50 percent holding for cash.

The Russian billionaire partners had previously indicated their desire to buy only half of BP’s stake in the 50/50 joint oil venture at market value. Russian billionaire Mikhail Fridman, a member of AAR, previously estimated the 25 percent share package to be worth $7-10 billion, in an offer rejected by BP.

The British oil giant is currently holding talks both with AAR and Russian state-controlled oil company Rosneft on a possible sale of its stake, which analysts estimate is worth $25 billion.

“The AAR consortium plans to make BP a new and wider offer to repurchase all of its shares in TNK-BP for cash. We have started work with Rothschild Group to syndicate banks to finance the deal,” he said.

Under the TNK-BP shareholder agreement, BP has 90 days for “good faith negotiations with AAR,” during which it may not sell its stake to other bidders. This term expires on October 17.