Elf Bids $2Bln for Norway's Saga
- By Alister Doyle
- May. 29 1999 00:00
OSLO, Norway -- French oil company Elf Aquitaine made a surprise 17 billion krone ($2.15 billion) bid for Norway's Saga Petroleum on Friday, topping a rival offer by Norway's Norsk Hydro ASA.
Undeterred by signs that Norway's government wants to keep Saga in Norwegian hands, Elf said it was making a friendly bid after encouragement from Saga, which has been seeking foreign partners to avoid being carved up by bigger Norwegian firms.
"The offer for Saga is in line with our strategy to develop our key areas of exploration and production via selective buying," Elf chief Philippe Jaffre said. Saga is continental Europe's only pure oil and gas production and exploration firm.
Elf's cash offer of 115 kroner per share compares with an all-paper one-for-three share bid by Norsk Hydro.
In Paris, Elf shares were down about 1 percent at 135.9 euros in mid-morning.
Saga shares leapt 11 kroner to 117 crowns on the Oslo bourse, on hopes for a takeover battle for the company, while Hydro's shares dipped 2.5 kroner to 316 kroner f giving a Saga offer price at about 105.3 kroner per share.
Norsk Hydro, whose interests range from oil and petrochemicals to light metals and fertilizers, unveiled its takeover offer on May 10. Hydro declined immediate comment on the Elf offer.
Under Hydro's planned takeover, state oil firm Statoil would get 25 percent of the company in a carve-up announced Thursday, with Hydro keeping the rest. Statoil is the biggest shareholder in Saga with a 20 percent stake.
To bypass Statoil, Elf said its offer required acceptances from 67 percent of shareholders f a less favorable deal for Elf than a full takeover needing acceptances from 90 percent of shareholders.
Although Elf said it had received encouragement from Saga, it was still working to get the Saga board to give a formal recommendation to shareholders. Saga said that the two companies had been in talks for some time.
Norway's Oil and Energy Ministry gave conflicting signals about the bid.
Oil and Energy Minister Anne Enger Lahnstein said she was sticking to earlier statements it was important for Saga to stay in Norwegian hands. "That's clear. I believe the same thing today as I believed yesterday," she said.
But Deputy Minister Erlend Grimstad said that Norwegian authorities would let Saga shareholders decide. And he said any takeover offer for Saga from Elf would be treated in a normal way by Norwegian authorities.
The French company said a takeover would raise Elf's upstream reserves by a quarter and strengthen its position in the European gas market.
A takeover would raise Elf's certain and probable reserves by 1.4 billion barrels of oil equivalents (boe) and proven reserves by 867 million boe.
Statoil, Saga's biggest shareholder, said that it was still bound by its deal with Norsk Hydro.
"With the deal we have done with Norsk Hydro, we are bound by Hydro's offer," Statoil Chairman Ole Lund said. The pact will break down, however, if other shareholders reject Hydro's bid.
Elf said a takeover would allow synergies worth 1 billion kroner in gross annual cost savings. Elf said it would organize its oil and gas activities off Norway and retain the Saga name.