AAR to bid for entire BP stake in TNK-BP
The billionaire quartet that owns half of Anglo-Russian oil firm TNK-BP (TNBP.MM) is interested in buying out BP's entire 50 percent stake, and will make a binding all-cash offer by mid-October, Reuters reports quoting a source familiar with the matter.
"We will pay cash, but have not yet determined the price," said the source, who is close to the AAR consortium that represents shareholders Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik.
AAR had said it was willing to pay $10 billion for a 25 percent stake in TNK-BP, Russia's third-largest oil company. BP, which put its stake up for sale in June, was not interested in that offer, sources said.
AAR expanded its bid after state oil major Rosneft (ROSN.MM) said it wanted to buy BP's stake in TNK-BP for cash and stock in a deal that could be worth more than $20 billion.
Such a deal would require government approval and is opposed by some senior Russian officials.
Under a shareholder agreement, only AAR may make an offer before a 90-day deadline - which falls in mid-October - that follows BP's announcement that it planned to sell its stake. Other suitors may then strike a deal, creating the prospect of a bidding contest.
AAR would "likely" fund the deal by borrowing through TNK-BP, the source said. How much the AAR shareholders themselves might invest remains unclear. The consortium will start negotiations with banks this week.
Bankers have told Reuters that it would be possible for AAR to finance a significant portion of any purchase by leveraging up TNK-BP, which has paid out $19 billion in dividends since BP came into the venture in 2003.
