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. Last Updated: 07/27/2016

Imperial Gets Offer to Sell a 25% Stake

Imperial Energy, a London-listed oil company that has come under sustained pressure in Russia this year over the size of its reserves, said Thursday that it had received an unsolicited offer for a 25 percent stake.

"The board ... is currently reviewing this proposal and there is no certainty that any agreement will be entered into," Imperial said in a statement.

The company said a financial investor proposed to subscribe for newly issued shares and that the offer represented a discount on the current share price.

Imperial's shares were trading down 1.9 percent as of 3 p.m. Thursday on the London Stock Exchange at 1,350 pence ($28.07).

Imperial, which has most of its assets in the Tomsk region, has been targeted by the Natural Resources Ministry's environmental watchdog this year and accused of inflating its reserves. The claims have prompted outrage from Imperial's management, which has accused Oleg Mitvol, the deputy head of the watchdog, of overstepping his authority.

The sustained pressure from the authorities has created volatility in the company's share price, and analysts say the company now presents an obvious target for investors.

"The company looks cheap, and the quality of assets has never been in doubt," said Artyom Konchin, an oil analyst with Aton brokerage, adding that he saw fair value of 1,650 pence for the company.

Mitvol's statements in April this year drove Imperial's share price down by about 30 percent. In September, Mitvol said his agency had revoked five of the oil firm's licenses, sending the shares down by 15 percent. It later emerged that the statements were related to fields previously relinquished by Imperial for lack of prospects.

Imperial's management has strongly hinted that Russian officials close to Mitvol's agency have been involved in insider trading in the company's shares and, in July this year, it asked the Financial Services Authority, Britain's financial watchdog, to look into the trading in its stock. The FSA refused to confirm on Thursday whether it was or had been investigating the matter.

Analysts said a well-connected investor could offer the company's shareholders some level of comfort.

"Whoever [the potential buyer] is probably came along and said: 'You need money, you need some protection, I can give you both and here's my price,'" said a London-based analyst, who spoke on condition of anonymity.

Aton's Konchin identified other companies operating in the Tomsk region, such as Tomskneft and Gazprom Neft, as potentially interested parties. Gazprom Neft and Imperial have a cooperation agreement in the Tomsk region, dating back to mid-2006.

Natalya Vyalkina, a spokeswoman for Gazprom Neft, denied on Thursday that the company was holding any talks with Imperial.

Konchin said a parallel could not necessarily be drawn between the investor behind the approach and the wrangles with the Russian watchdog.

"You might take advantage of the situation, but that doesn't mean you created it," he said.