Imperial approached by China’s Sinopec
Sinopec has made an approach to Imperial Energy, the London-listed oil and gas explorer, which could derail takeover talks between the UK group and India’s ONGC.
The state-owned oil group, made an approach to Imperial last week and is in the process of conducting due diligence on a formal offer.Imperial’s assets are mostly in Russia. Sinopec has sounded out the Russian authorities about the viability of making an offer.
Imperial on Monday confirmed that it had received a second approach. Its share price rose as much as 8.4 per cent to £11.64 on the news, valuing its equity at just under £1.2bn. The stock has been one of the worst market performers among mid-sized oil companies in London this year. They have risen as high as £14.27 and as low as 637p during the course of the past 12 months.
Sinopec’s move could scupper a £12.90a share, £1.3bn ($2.6bn) approach from ONGC. Imperial last month announced it was in talks regarding a possible offer and although it did not name the potential bidder. It is known that ONGC was behind the bid.
Imperial, founded by chairman Peter Levine in 2004, has built up a number of assets across Russia and other countries in the former Soviet Union. It produced about 10,000 barrels of oil a day in December last year and plans to raise this to 80,000 b/d by the end of 2011.
The company has been the subject of approaches in the past. Last year it was approached by a unit of Gazprom, Russia’s state-controlled gas company, about taking a stake, but agreement could not be reached.
Merrill Lynch is advising Imperial on the two approaches.
Tags: Sinopec