Imperial confirms interest in a possible £12.90 a share offer from ONGC
15 Jul 2008
After news broke yesterday about state-owned ONGC's possible interest in Russia's Imperial Energy Corp Plc, a £1billion-plus (around $2 billion) oil and gas company registered in Leeds, the latter has disclosed its interest in a possible offer of £12.90 a share. (See: ONGC in bid to acquire Russia's Imperial Energy).
Such a valuation would place the price at a considerable premium of 42 per cent over Monday's closing price on the London Stock Exchange, resulting in a potential market capitalization of £1.32 billion.
Imperial said on Monday it had received a bid approach from a party it did not name but which industry sources identified as ONGC. "There can be no certainty that an offer will ultimately be made for the company or as to the terms on which any such offer might be made," Imperial said in today's statement.
After this announcement, the share price expectedly soared, climbing as much as £2.62, or 29 per cent, to £11.72, the biggest one-day gain since 6 March last year. The stock traded at £10.98 as of 2:33 p.m. local time.
A successful deal would mark ONGC's second investment in resource-rich Russia. The Indian company is a partner in the Sakhalin-1 oil and gas consortium headed by US major Exxon XON.M.
Imperial said in November 2007 that Gazprombank, the banking arm of Gazprom, had made an approach to buy a quarter of its stock at a discount to the market price but the talks ended without a deal.
Imperial expects to produce 25,000 barrels of oil a day by the end of this year after ''disappointing'' production during the first half, the company said on 24 June. The explorer pumped 7,000 barrels a day in the first quarter, Imperial said in April.
The company expects to start production this September at its Kiev Eganskoye field in Siberia, east of the Ob River. Imperial shares, which had traded as high as £14.27 on 10 January this year, plunged below £7 on 2 April when the company said it may sell new shares to fund exploration.
