In a recent press conference, Russian President Vladimir Putin officially confirmed Gazprom’s desire to purchase large part of Sibneft.
"Gazprom is negotiating the credit of $12 billion with the Western banks in order to purchase Sibneft" – says an anonymous source in the investment company Interfin Trade. This might become the largest merger and acquisition in Gazprom’s history. "Many banks want to participate, and everybody is working hard on it at the moment."
The source at PRIME-TASS said that negotiations are in their very first stage, Gazprom wants to purchase 72% of Sibneft, and the credit line might be lower than the one mentioned above.
The market price of 75% of the shares of Sibneft is $11.5 billion, and the main share holders have 72%, represented by the Millhouse Capital group. If Gazprom executes the purchase, the other 3% can be purchased off the public market, and eventually the government-owned giant will have a dominating stake in the company. Some sources are also speculating that Shell might join Gazprom in this deal, on the heels of their recent megadeals in Russia's Far East. One of the other foreign firms to benefit from the deal will be Germany's Ruhrgas, which owns 6% of Gazprom).
Millhouse Capital and Sibneft are owned by Roman Abramovich, the Russian governor, confidant to Boris Yeltsin’s favorite daughter Tatyana, now the richest man in Russia, resident of London, owner of several planes (including Boeing 767-300), yachts and castles (the price of each "toy" is over $100 million). Abramovich is best known internationally as the owner of the European champions' league-dominating British soccer club Chelsea.
Abramovich is not any different from Mikhail Khodorkovsky, or Boris Berezovsky; he started his business and made his fortune under the very questionable circumstances in the chaos of the early Russian "privatization".
However Abramovich, now 38, has been much more clever than his fellow oligarchs. He moved to get elected as a governor in a remote Siberian state, which guarantees him legal immunity, and he is constantly surrounded with an army of bodyguards and riding in armored bullet-proof vehicles. Most importantly, Abramovich has maintained tight relations with the Kremlin and made a smooth transition from the "anything goes" Yeltsin era to the "law and order" Putin regime. Abramovich, unlike Khordokovsky or Berezovsky, never threatened the Putin regime with open dissent or the funding of opposition parties.
The purchase of Abramovich’s Sibneft by the Kremlin’s Gazprom should be a profitable bail-out deal for the oligarch, based on a friendly handshake with Putin. Russia's other top oligarchs are trembling at the thought of more seizures of their assets by the Putin regime (Berezovsky has won political asylum Britain, and Khodorkovsky is reading books in jail). Abramovich in contrast, will get full cash value for the property that he managed to appropriate from the Soviet Union in his early twenties, and the shares he acquired during Kremlin's destruction of YUKOS.
