Russia's state-controlled OAO Gazprom Neft swooped down on small Russian oil company Sibir Energy PLC Thursday, trumping a bid by rival TNK-BP Ltd. announced just a day earlier.
The battle for Sibir could be a harbinger of more deals to come as big, cash-rich energy companies gobble up smaller players hit by the credit crunch and the low price of oil. It was unclear, however, if Gazprom Neft intended to acquire all of Sibir or was just trying to prevent other oil companies from doing so.
The tussle over London-listed Sibir unfolded rapidly. Credit Suisse International said Wednesday that it was offering to buy shares in the company on behalf of TNK-BP, Russia's third-largest oil producer by output and a 50-50 joint venture between BP PLC and a group of Soviet-born billionaires, for 430 pence ($6.22) a share, valuing the company at $2.4 billion.
Within hours, Russian investment bank Renaissance Capital said Gazprom Neft, the oil-producing unit of natural-gas company OAO Gazprom, was offering 500 pence a share for Sibir, valuing it at $2.8 billion and prompting TNK-BP to withdraw.
Sibir said an unnamed third party that made an informal approach pulled out in the wake of the bids from Gazprom Neft and TNK-BP.
In a statement, Renaissance Capital said Gazprom Neft expected to own more than 16% of Sibir. "We are pleased to have become a significant minority shareholder in a company that we regard as a world-class asset," said Alexander Dyukov, Gazprom Neft's chief executive.
TNK-BP declined to comment. A spokesman for BP said the company was "a little disappointed, but there'll be other opportunities to invest in Russia in the future."
Sibir has been seen as a takeover target since late last year, when the global economic downturn and collapse in the Russian stock market ensnared its key shareholder, Moscow property tycoon Chalva Tchigirinski. Share trading has been suspended since February, after the company revealed Mr. Tchigirinski owed it $325 million. Sibir last traded at 174 pence a share. Russia's Sberbank holds Mr. Tchigirinski's stake and that of business partner Igor Kesayev as collateral on unpaid loans.
A person close to Gazprom Neft said the company was surprised by the timing and high price of TNK-BP's offer, so it decided to come back with a "knockout bid."
He said the aim was to amass enough stock to block another buyer from taking a substantial position in Sibir's shares.
In any case, accumulating more shares in Sibir could prove tricky. Gazprom Neft already has bought about half of the freely traded shares, but Mr. Tchigirinski has shown no desire to sell his 23.5% stake in the company, which has a 50% interest in an oilfield in Siberia called Salym, a stake in a Moscow oil refinery in which Gazprom Neft is also a shareholder and ownership of retail gas stations in the Moscow area. Mr. Kesayev also owns 23.5%. The city of Moscow, which owns 18% of Sibir, also says it doesn't want to sell.
Analysts said the Gazprom Neft bid will be good news for Royal Dutch Shell PLC, the Anglo-Dutch supermajor that is Sibir's 50-50 partner in the Salym field. Shell would prefer to have Gazprom as a partner there over BP, one of its main rivals.