Indian company to pay $2.6B for Britain's Imperial
Thursday, 28 August 2008

AP, LONDON -- India's state-run Oil & Natural Gas Corp. has agreed to buy Britain's Imperial Energy PLC for $2.6 billion in a cash deal that will help ONGC meet surging fuel demand from its burgeoning domestic economy.

ONGC and Imperial said in a joint statement on Tuesday that their boards had agreed on the terms which value Imperial shares at 1,250 pence ($22.95) each.
 
London-based Imperial, which revealed earlier this month that it had received potential takeover approaches from two different parties, said that the ONGC offer ''reflects a fair value.''
 
Imperial, an independent oil and gas exploration company with holdings mainly in western Siberia and Kazakhstan, has not named its other suitor, but media reports have suggested it was state-owned Chinese oil refiner Sinopec Corp.
 
Both China and India have encouraged their state-owned oil and gas companies to diversify and expand their access to scarce energy resources.
 
ONGC is India's largest oil and gas explorer and buys hydrocarbon assets abroad through its overseas arm, ONGC Videsh Ltd., to meet a growing domestic demand for fuel and energy to sustain the country's booming economy. About 70 percent of India's fuel needs are currently imported.
 
''The acquisition represents an important addition to OVL's operations and we believe OVL's financial strength and technical expertise will further enhance the attractive growth potential of the business in the Tomsk region,'' said ONGC Videsh managing director R.S. Butola, referring to Imperial's interests in Siberia. ''Additionally, we view this as an important opportunity to expand on the continuing co-operation between Russia and India in the energy sector.''
 
Imperial Energy executive chairman Peter Levine said that the offer matches Imperial's rapid growth in recent years from a pure exploration company.
 
''As Imperial Energy moves into the next phase of its development, with production increasing further over the coming years, it makes strategic sense to be part of a larger group,'' Levine said. ''The share offer fairly reflects Imperial Energy's achievements and represents an excellent opportunity to realize a compelling value in cash.''
 
The offer price represents a 62 percent premium to Imperial's share price close on July 11, the last day before the company revealed it had received an approach.
 
The stock was down 2 percent at 1,215 pence ($22.29) at midafternoon Tuesday in London.
 
The deal agreed by the two boards includes a cash offer for Imperial Energy's convertible bonds.
 
Imperial Energy convertible bondholders will be entitled to receive around 60,370 pounds in cash for each $100,000 principal amount of the bonds, reflecting the adjusted exchange price of the Imperial Energy convertible bonds which applies in the event of a change of control of Imperial Energy.

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