Britoil Says Assets Worth 55% More Than BP Offers
North Sea oil exploration group Britoil PLC, facing a takeover bid from British Petroleum Co., said Wednesday its assets had been valued at about 55% more than the oil giant was offering.
A Britoil statement said an independent study by Robertson ERC Ltd. valued its shares at 6.99 pounds ($12.51) and assets at 3.525 billion pounds ($6.31 billion).
The 4.50 pounds ($8.05) a share bid by BP, which currently owns 29.9% of Britoil, values the oil firm at 2.27 billion pound ($4 billion).
“We have consistently stated that BP’s offer undervalues Britoil,” Britoil’s chief executive David Walker said in the statement.
Britoil, Scotland’s biggest firm, said the report was commissioned to help its board, advisers and shareholders assess BP’s offer.
Britoil shares were up 20 pence (36 cents) at 4.75 pounds ($8.50) on the London Stock Exchange Wednesday afternoon after touching 4.80 pounds ($8.59) earlier in the day.
Britoil is expected to issue its defense document next week, and Walker said it would make plain the opportunities Britoil has to develop into a major oil exploration and production firm.
BP, Britain’s largest company and the world’s third largest oil major, has said it can develop Britoil’s rich North Sea sectors more quickly because of its financial muscle.
Speculation is growing within the British oil industry that Los Angeles-based Atlantic Richfield, which nows owns 24.06% of Britoil, may launch a full bid to counter BP’s.
Britain’s opposition Labor Party said Wednesday that a crisis of authority could develop in Britoil if the BP bid succeeds, and urged the government to say categorically that BP would never gain full control.
Britoil, privatized in the early 1980s, is protected by a so-called “golden share” which allows the government to outvote all shareholders. The BP bid is going ahead even though the government has said it would not relinquish control.
In a separate development, Trade and Industry Secretary Lord Young said that government was weighing the large stake in BP held by the Kuwait Investment Office, an arm of the Kuwait government.
Young told the House of Lords that the director-general of fair trading, Sir Gordon Borrie, was considering the KIO’s holding of more than 18%.
“He will advise me whether there may be a merger situation which qualifies for investigation and, if so, whether it should be referred to the Monopolies Commission,” Young said.
The KIO has snapped up many partly-paid shares issued in the October 7.2 billion pound ($12.88 billion) sale of new BP stock and the government’s remaining 31.5% stake.
KIO’s nibbling at BP since the stock sale, which fetched prices well below what had been expected due to the stock market crash, had raised concern in Britain. But the Gulf state has promised London it sees the stake as a long-term investment and does not plan to use it to control BP.
