Investors are not ready to sell LUKoil shares for federal prices

Saturday, January 16, 2021

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According to Vedomosti's sources, not a single shareholder took advantage of the ConocoPhillips offer to sell one LUKoil share for $30.76. LUKoil managers did not take part in the deal, as the price was not right for shareholders, a Vedomosti source close to this offer's organizers noted. At the same time, the Audit Chamber warned the president and the government that the price of LUKoil shares at a recent privatization auction did not correspond to market levels. A source close to LUKoil believes that the US company will eventually buy the shares and so control 10% of the LUKoil stock. This is a mandatory precondition for appointing a ConocoPhillips representative to the LUKoil board. As I see it, the prices are bound to go up, Vedomosti's interlocutor added. Some analysts think that ConocoPhillips can succeed by offering $31-31.5 per share. Valery Nesterov from Troika Dialog believes that the abortive deal will facilitate LUKoil's more successful stock-market performance because even small investors and minority shareholders will remember that ConocoPhillips will hit the market once again. Shares were going for $32.45 on the Russian Trading System (RTS) yesterday. Some experts are inclined to think that Capital Group, which acquired 10% of the LUKoil stock a few years ago, might share that package with ConocoPhillips, if the market deal proves unsuccessful. LUKoil's October 6 RTS capitalization levels totaled $27.4 billion. ConocoPhillips owns 7.59% of the company's corporate shares, while top managers control 20.58%

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