The planned secondary offering of shares in Tupras the Turkish oil refining group, has attracted interest from about 10 potential bidders, including Russia's Yukos-Sibneft and a range of domestic investors.
Initial bids are expected by October 2 for the 66 per cent stake being sold in the group by the state privatisation agency. An initial public offering three years ago valued the group at $3.9bn, though its capitalisation has since fallen to about $1.9bn.
The four Tupras refineries operate a de facto monopoly, which analysts said offered a unique entry point into the fast-growing Turkish market.
"My guess is that bids will be in the $1.5bn-$2bn region," said Metin Ar, chief executive of Garanti Securities in Istanbul.
The Turkish government views Tupras as a strategic asset and wants to retain a board seat with veto power following the share sale.
Some bankers said this, and the mixed profitability of the refineries, could depress the final level of interest as well as the sale price. The government is thought likely to favour a joint venture bid that includes Turkish capital.
Domestic and Russian bidders dominate the shortlist of those that have entered the Tupras data room. Newly merged Yukos-Sibneft has teamed up with Oyak, a conglomerate operated by the Turkish army's pension fund, while BP's interest is through its joint venture with Russia's TNK. Lukoil and Tatneft are also in the running.
Domestic interest comes from Sabanci and Koc, Tukey's largest privately owned conglomerates, and the petroleum distribution company POAS.
Analysts cautioned not all of those that paid for entry to the data room were expected to submit final offers.
Lukoil, for example, is interested in only one of the four refineries, though its proposal to buy the facility and build a pipeline to a Russian oil field was rejected by the Turkish government.
Investment bankers also suggested the domestic contenders lacked the funding to make bids and were reliant on securing overseas partners. POAS, which controls about a third of the Turkish market, is among those looking for an ally after the bid deadline was extended by two weeks. Bankers also suggested BP-TNK and Chevron Texaco were unlikely to bid.
Tupras reported net profits of $115m on sales of $5.15bn in 2002.
(By Metin Munir from the Financial Times 26/08/03)