Imperial, though a little known company, is termed by many as a “bluechip petroleum engineering company”. It has assets in Russia with considerable proven reserves. OVL’s near victory over Sinopec comes after a number of aborted or failed attempts by OVL to grab a pie of the global oil equity. In the last couple of years, China’s aggressive bidding has seen it walk away with prized catches such as Encana in Ecuador, Petro Kazakhstan, Marathon Oil Corp and the BP-operated Block B in Angola.

This deal could be the mother of all takeovers in the Indian energy sector. OVL has valued Imperial at 1.4 billion pounds (around Rs 11,300 crore or $2.58 billion). Imperial, set up only four years ago, is an independent upstream oil exploration and production company focused on the Commonwealth of Independent States and, in particular, the Russian Federation. It is listed on the LSE. It made oil sales of $19.9 million and an operating loss of $39 million in 2007 as against $3.1 million and $ 15.2 million respectively in 2006.

The offer will be made Bidco, a wholly-owned subsidiary of OVL incorporated in Cyprus and formed for the purpose of making offers. OVL is a wholly-owned subsidiary of Oil and Natural Gas Corporation Limited, the largest oil and gas exploration and production company in Asia. The primary business of OVL is the exploration and production of oil and gas outside India.

Imperial directors also decided to recommend that Imperial convertible bondholders accept the convertible bond offer. “Imperial Energy’s directors are pleased to have been able to reach agreement with OVL and intend unanimously to recommend shareholders accept the proposed offer, which reflects a fair value and marks a premium of 62 per cent since the day before Imperial Energy first announced it had received an approach,” said Peter Levine, Imperial’s executive chairman.

As part of the deal, Imperial shareholders will be entitled to receive 1,250 pence in cash for each Imperial Energy share held, representing a premium of approximately 61.9 per cent to 772 pence, the closing mid-market price per Imperial Energy share on July 11, 2008 (being the last business day prior to the announcement that Imperial Energy had received an approach and the commencement of the offer period).

It also represents a 36.3 per cent premium to 917 pence, the average closing mid-market price per Imperial Energy share from May 6, 2008 (the day the Imperial Energy shares commenced trading ex-rights following the rights issue announced by Imperial on April 16) to July 11, 2008.

R.S. Butola, managing director of OVL, said, “We are delighted that the Imperial Energy directors have taken the unanimous decision to recommend our offer. The acquisition represents an important addition to OVL’s operations, and we believe OVL’s financial strength and technical expertise will further enhance the attractive growth potential of the business in the Tomsk region.”

61.9 per cent

The premium Imperial shareholders will get —1,250 pence in cash for each share held

Profile

• Founded in 2004, Imperial Energy is listed on the London Stock Exchange

• The UK firm operates mainly in Russia and CIS states

• It has expanded by acquisition and acquired exploration and production licences, mainly in the Tomsk region of Western Siberia, Russia

• Imperia• made oi• sales of $19.9 million and an operating loss of $39 million in 2007

UK is India Inc’s shopping mall

The UK has turned out to be a fertile ground for takeovers by Indian companies. Here are some of the major takeovers by Indian firms in the UK in the last two years:

• Tata Steel bought steel firm Corus group for $12 bn to become the fifth largest steel maker in the world in January 2007

• Tata Motors acquired luxury car maker Jaguar Land Rover in a $2.3-billion deal in March 2008

• Mallya’s UB group bought Scottish spirit maker Whyte & Mackay for $ 1.18 billion in May 2007

•Infosys has bid for SAP consultant Axon for $753 million in August 2008