March 15, 2010 / 5:12 AM / in 7 years

UPDATE 1-JPMorgan,Hopu hired on $3.1 bln CNOOC-Bridas JV-sources

4 Min Read

* CNOOC hires JPMorgan as advisor on joint venture

* Beijing-based Hopu hired by Argentina's Bridas

* Deal marks first advisory role for Hopu (Adds JPMorgan's comments, more details about Hopu)

By George Chen, Asia Private Equity Correspondent

SHANGHAI, March 15 (Reuters) - Wall Street bank JPMorgan (JPM.N) and Beijing-based Hopu Investments, run by influential China dealmaker Fang Fenglei, are advisers for a $3.1 billion energy joint venture between CNOOC (0883.HK)(CEO.N) and Argentina's Bridas Energy Holdings, banking sources said.

JPMorgan has long-time business ties with China National Offshore Oil Corp, China's biggest offshore oil explorer, while the deal marks the first advisory role for Hopu, which usually invests on its own.

CNOOC hired JPMorgan as sole adviser on the buy side, while Beijing-based Hopu was hired by Bridas as adviser for the sell side, sources with knowledge of the matter said on Monday.

JPMorgan confirmed its advisory role in the deal, while Hopu declined to comment.

On Sunday, CNOOC said it would pay $3.1 billion to take a 50 percent stake Bridas Energy subsidiary Bridas Corp. Bridas Corp, wholly-owned by Bridas Energy, would become equally owned by the partners, CNOOC said in a statement to the Hong Kong stock exchange. [ID:nTOE62D01I]

"This is an important transaction for CNOOC that has been well-structured and executed," said Yash Kaman, head of Asia oil and gas investment banking at JPMorgan.

"This will ensure CNOOC maximises the benefits of the operational and regional expertise of Bridas management and the Bulgheroni family, instead of starting from scratch," Kaman said in an emailed statement in response to Reuters inquiries.

Bridas has been built into the top performer in a region that is relatively new for CNOOC. Rather than buying out Bridas, the two companies are entering into a partnership in which Bridas' management and the founding Bulgheroni family are equally motivated to continue to drive value.

Hopu Aiming to Move Beyond Private Equity

JPMorgan advised on CNOOC's high-profile acquisition of Unocal in 2005. The deal, which caught international public and media attention, eventually failed after being blocked by a political outcry from the United States. Despite the failure, business ties between JPMorgan and CNOOC have since strengthened. The New York-headquartered bank later helped CNOOC on its $2 billion share placement.

The deal also reveals Hopu's ambition to expand into the already competitive merger and acquisition advisory business in China, as well as to continue to invest on its own.

"Apparently, Hopu wants to become something like Blackstone (BX.N) in China. I am sure you will see Hopu take on more advisory roles in major deals in the future," said a banker familiar with the matter.

"This is just a beginning for Hopu," he said, adding that the fund itself would not invest in the CNOOC-Bridas tie-up.

Fang, who helped Goldman Sachs (GS.N) launch its China investment banking joint venture, established Beijing-based Hopu Investments in 2007 and completed raising a $2.5 billion China fund in 2008.

For related Asian private equity news, Reuters 3000 Xtra users can double click on: [LEN-RTRS-ASIA-PVE]

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