* Purchase would give exposure to North Sea oil assets
* Offer amounts to around $192 million, or C$0.85/share
* Follows financial assistance to Sterling Resources
* Sterling Resources shares up 75 percent to C$0.83
By Emma Farge
GENEVA, Feb 13 (Reuters) – Top oil trading house Vitol plans
to offer C$192 million ($192 million) for Canada-listed oil and
gas group Sterling Resources, to gain a foothold in the
North Sea oil and gas sector.
The planned deal, worth C$0.85 per Sterling share – a 79
percent premium to Tuesday’s close at C$0.475, is the latest in
a series of moves by Swiss firm Vitol to acquire physical energy
assets.
Following the model of Glencore, many private
trading houses have, in recent years, used their growing
financial firepower to buy smaller rivals and increase their
control of commodity supply chains.
“Vitol has held discussions with Sterling’s management and,
based on the company’s inability to find an acceptable long-term
financing solution, Vitol Anker has decided to pursue an offer
for the company,” Vitol said on Wednesday.
The bid follows the purchase of a Swiss oil refinery from
insolvent refiner Petroplus last year and the gradual expansion
of oil exploration in west Africa.
Calgary-based Sterling Resources, drilling for oil and gas
in the North Sea and with energy assets in France, the
Netherlands and Romania, said it had received an unsolicited
takeover bid from Vitol.
“Sterling has also had discussions with third parties on
other potential transactions including business combinations,
sales of subsidiaries and assets and additional financing
opportunities,” it said.
Sterling shares were up 75 percent to C$0.83 by 1535 GMT.
FINANCIAL MIGHT
Vitol, which reported revenues near $300 billion in 2011,
said it was prepared to enter further talks with Sterling to
provide additional interim financing.
Sterling said earlier this month its total financial debt
was 87.9 million pounds ($138 million) at the end of 2012. It is
planning a high-yield bond issue for around $250 million in the
second quarter.
The financial firepower of top trading houses such as Vitol
is one factor helping them snap up assets and beat smaller
competitors through better access to supplies, analysts say.
“The big trading houses have had such strong results in
recent years and they have secured so much cash that they have
to make use of it,” said Ton Schurink at Geneva-based Commodity
Finance Trading Advisory Services.
Paul Rieveley, head of commodities and energy trading at
KPMG Switzerland, said the acquisition would help Vitol
reinforce its strength in physical markets.
“Consolidation is about building barriers to entry to
protect previously acquired market positions,” he said.