LONDON Nov 21 The bid vehicle of former
BP Plc Chief Executive Tony Hayward and financier
Nathaniel Rothschild completed its controversial $2
billion acquisition of Kurdistan-focused Genel Energy on Monday.
An expected rise in shares of the group, previously known as
Vallares and now known as Genel Energry Plc, failed to
materialise. The stock traded up less than 1.0 percent at 1000
pence at 0805 GMT, ahead of a 0.8 percent drop in the STOXX
Europe 600 Oil and Gas index.
The shares had been suspended since the deal was announced
Analysts had predicted a significant rise in the shares,
because the group had made good on its pledge to find emerging
market oil reserves for a modest price.
Some analysts also predicted the group's plans to bolt on
other acquisitions in the semi-autonomous Kurdish region of Iraq
would be a winner with investors.
The shares were also expected to get a lift from the fact
the company expects to enter the FTSE 100 index of the UK's
largest companies, which means passive, tracker funds will be
forced to buy its shares.
The deal marks Hayward's return to a senior management role
in the oil business after being forced out of BP following the
Gulf of Mexico oil spill. He will be CEO of Genel Energy Plc.
However the deal has been criticised for giving Genel's
former owners a fast-track route to a London Stock Exchange
listing -- something they previously tried to achieve before one
of them, Mehmet Sepil, received a major fine from the financial
Services Authority for insider dealing.
Mehmet Karamehmet, the other major shareholder, was accused
in a U.S. diplomatic cable posted on the Wikileaks website of
issuing death threats to a former business partner.
Earlier this month Turkey's appeals court called for his
retrial on charges of embezzlement, after a previous conviction
Karamehmet and Sepil will own around half of Genel Energy.
The FTSE Group said earlier this month it was looking at
tightening entry requirements for its UK indices in response to
investor concerns it is too easy for companies with low free
floats and hazy corporate governance standards to join the
prestigious FTSE 100.
The Association of British Insurers, whose members own 20
percent of the UK stock market, is worried stocks enter the FTSE
100 too easily and is exploring ways to put would-be entrants
under closer scrutiny, an insurance industry source told
Hayward and Sepil have said in interviews recently they
thought the Kurdish assets of Norway's DNO would be a
good fit for Genel Energy. Other potential acquisition targets
include Canada's ShaMaran Petroleum and Longford Energy.