Kazakh oil company warns of price collapse at UK unit if minority shareholders reject bid for tighter control

By bne IntelliNews June 22, 2016

Shares at KazMunayGas' London-listed upstream subsidiary may decline sharply if minority shareholders reject the Kazakh oil company bid for greater control, the head of the state-owned company Sauat Mynbayev said on June 21. At the same time he said KazMunayGas is not forcing minorities to exit KazMunaiGas Exploration Production (KMG EP).

KazMunayGas, which holds a 63% stake in KMG EP, offered to buy minorities at a price $47.28 per common share, or $7.88 per global depository receipt (GDR). The offer, part of the Kazakh firm's plans to establish greater control over the well-heeled subsidiary, was announced on June 17 and represented a 12.6% premium to the closing price of $7.00 on June 16.

The purchase offer is part of a broader proposal to amend KMG EP’s charter and an agreement governing the relationship between the two companies and is conditional on the approval of those amendments, to be voted at an extraordinary shareholders meeting scheduled for August 3. Independent non-executive directors of KMG EP oppose the plan saying that proposed changes “would significantly weaken the protections afforded to independent shareholders”

“If [independent] shareholders say that our offer is not interesting to them there will be no buyback. However, then responsibility for a future trend of the share price would be spread among all minorities shareholders,” Mynbayev told journalists on May 21. “I assume the share price will plunge and I assume it may be $5 per share. That’s why this is an issue and decision of each and individual minority shareholder.” KMG EP shares edged down 0.14% to close at $7.32 on June 21.

The head of the national company denied attempts to force minority shareholders to sell their stakes. “It seems fair to me that if you don’t want to sell, don’t sell. This is not an offer of compulsory purchase and this is not an offer of delisting. We believe we should go to the market with such open position and make an offer,” Mynbayev said.

Related Articles

Latvia issues permits to new gas infrastructure holding

The Latvian Public Utilities Commission (SPRK) announced on January 5 that it has issued licences to Conexus Baltic Grid for the transmission and storage of gas. Conexus Baltic Grid will control ... more

Iran to seek arbitration over termination of gas flow from Turkmenistan

The National Iranian Gas Company (NIGC) intends to take its recent gas dispute with Turkmenistan to international arbitration, Mehr News Agency reported on January 4, citing ... more

CEZ ignores Czech finance minister and re-elects CEO

The supervisory board at Czech power group CEZ ignored pressure from the finance ministry to dump the current management, local media report. Finance Minister Andrej Babis has been accumulating ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss