* AAR to make bid by Oct. 17 - Khan
* Would welcome Rosneft as an equal partner
* Analysts value stake at $25 bln
MOSCOW, Oct 4 The billionaire quartet that owns
half of TNK-BP, will make a "competitive" offer for
BP's 50 percent stake in the Anglo-Russian oil firm by
Oct. 17, German Khan, one of the tycoons in the group, told the
Kommersant daily on Thursday.
An offer would raise the prospect of a bid contest between
AAR and Russia's top crude producer Rosneft, which has
also expressed interest in BP's stake in TNK-BP, Russia's
third-largest oil company.
"We have to make an offer to BP before Oct. 17, when a
90-day negotiation term expires. There is no final decision on
BP's stake valuation, but in any case it would be competitive,"
Khan told the newspaper.
Under a shareholder agreement, AAR has the exclusive right
to make an offer by a mid-October deadline that falls 90 days
after BP put the stake up for sale. Other suitors may then seek
to strike a deal, creating the prospect of a bidding contest.
AAR has hired investment bank Rothschild to explore ways to
fund a bid, which Khan said would be largely financed by
leveraging up TNK-BP, which has low debts and is highly cash
Independent analysts have valued BP's one-half stake in
TNK-BP at as much as $25 billion.
"Having consolidated TNK-BP's shares, AAR over time may
consider different options, including an IPO and attracting a
new strategic partner," added Khan, who is an executive director
A spokesman for TNK-BP declined to comment.
BP, which bought its stake in TNK-BP for $7 billion in 2003,
put it up for sale in June after a long-standing feud with the
AAR consortium of Soviet-born billionaires, including Khan.
Although sources close to BP say they look forward to a bid
contest between AAR and Rosneft, industry and banking sources in
Moscow doubt it will come to that.
Khan appeared to suggest that AAR would be able to work with
Rosneft, headed by powerful former Deputy Prime Minister Igor
Sechin, should the state oil major buy out BP.
"We don't see any problems with a partnership with Rosneft -
on the contrary, we already have successful experience of
working with the state company," said Khan, who added that any
partnership should be an equal one.
Rosneft, which has been expanding its upstream asset base
aggressively under Sechin, who is a close confidant of President
Vladimir Putin, has yet to win government backing to buy out BP.
Industry and banking sources doubt the Kremlin would allow a
head-to-head auction that might drive up the TNK-BP stake price,
but at this stage no political signal has yet emerged on which
suitor would be the preferred buyer.
Sechin was expected to brief investors in London on Friday
on Rosneft's strategic interest in TNK-BP.