TNK-BP co-owner invites in bidders for the business

City A.M. Reporter
TNK-BP, British oil major BP’s Russian joint venture that is embroiled in a shareholder dispute, may get a third investor, co-owner and former chief executive Mikhail Fridman.

Fridman, one of the four Soviet-born tycoons who share control of the 50-50 venture via the AAR consortium, quit as chief executive on Monday, deepening a leadership crisis that has deprived the company of a functioning board.

“Everything is possible and realistic. We are open to proposals,” Fridman told the Kommersant business daily in an interview yesterday. “There are no concrete offers, but it (TNK-BP) may be interesting to many.”

Fridman declined to comment to Kommersant what he considers to be fair value for TNK-BP, which is worth $38.4bn (£24.7bn) based on the current market price of its main listed unit, TNK-BP Holding. Bank of America Merrill Lynch, in a note dated 29 May, gave a $50bn value to TNK-BP International, a holding company that controls TNK-BP Holding and further assets including Slavneft and some Ukrainian assets.

“AAR might ask for a valuation of up to $55-$60bn on TNK-BP Holding alone, taking the transaction (to buy out AAR) to $30-$35bn” analysts led by Karen Kostanian wrote in the note.

Fridman dismissed suggestions that his resignation was related to former deputy Prime Minister Igor Sechin’s appointment to run state oil firm Rosneft following Vladimir Putin’s return to the presidency.

Under Sechin, Rosneft is expected to become a platform to consolidate Russian industry assets.