India's biggest oil producer, ONGC, said it had agreed a 1.4 billion pounds ($2.6 billion) take-over of Russia-focused Imperial Energy on Tuesday in a bid to secure supplies for India's booming economy. State-owned ONGC beat China's Sinopec to snatch the British-based oil explorer, though sources close to the deal said the Kremlin would likely expect ONGC to sell a stake on to a Russian state oil group such as Rosneft.
Imperial Energy Corp Plc said that ONGC's overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares. "This is a good price, given consideration for the current softening in oil prices, the turbulence on global stock markets and the geopolitical stage," brokerage Daniel Steward said in a research note.
Shares in Imperial, whose assets are mainly in the Tomsk region of Siberia, traded down 2.1 percent at 1,214 pence at 1454 GMT, suggesting investors do not expect a rival bid. Last month, Imperial reported it had received a 1,290 pence/share approach from an unnamed bidder, which sources familiar with the matter identified as ONGC. A subsequent approach from another party, which sources identified as Sinopec, sparked hopes of a bid battle.
But Sinopec downplayed talk of a bid on Tuesday and sources close to the deal said the state-owned oil refiner had done little due diligence despite being invited to do so. "Our parent company is doing preliminary work on these deals, but there's been no substantial progress," Su Shulin, Chairman of Sinopec's Sinopec Corp unit said.