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By John Helmer, Moscow

On Saturday, while the controlling shareholders of Sky News, Rupert Murdoch and his son James, were having to eat their words and apologize for invasion of privacy, bribery of policemen, lying to parliament, and other law-breaking — losing control of Sky News in the process — one of their ace reporters was claiming to have uncovered this scoop: “Exclusive: Hayward Eyes £8bn Russian Deals.”

According to Mark Kleinman, “Tony Hayward, the former boss of BP, is considering a blockbuster bid for two major Russian oil producers that could cost his new venture in the region of £8bn, I can exclusively reveal. Hayward is examining making offers for Bashneft, which has a market value of $11bn, and Russneft, both of which are part-owned by AFK Sistema, a Russian conglomerate headed by one of the country’s richest men.

“Under the plan, which is at a preliminary stage, Hayward’s new investment vehicle, Vallares, would acquire Sistema’s stakes in both companies, paving the way for the creation of an oil industry powerhouse. Sistema’s stake in Russneft is said to be worth about $1.5bn, according to comments made by the conglomerate’s chairman [Vladimir Yevtushenkov] to the Moscow Times last month.

“People close to Hayward say he may pursue both acquisitions or focus only on a deal with Bashneft, which is among Russia’s top ten oil companies, and has more than 1.25bn barrels of proven reserves, according to an independent audit conducted last year.

“Vallares has raised £1.3bn from investors eager to back Hayward just a year after he quit BP in the aftermath of the Gulf of Mexico oil spill. Yesterday, BP announced that it would adhere to enhanced safety and production standards when it returns to the region later this year.

“Hayward raised the money in partnership with Nat Rothschild, the billionaire financier who listed a similar vehicle Vallar, focused on acquiring mining assets last year, and Julian Metherell, a former Goldman Sachs banker.

“At £8bn, bids for the two Russian producers would be at the upper end of the valuation range indicated to Vallares investors when the vehicle floated on the London stock exchange last month.

“It would also crystallise a mammoth paper fortune for the founders of Vallares. Under the terms of its fundraising, Hayward, Rothschild and the two other founders will receive 6.7pc of the market value of their company in shares when they complete a transaction.

“If they decided to pursue both deals in Russia and Vallares had a market capitalisation of, say, £8bn on completion of the takeovers, the founders would be handed shares worth a staggering £536m. They would also be in line for further share payouts based on the performance of Vallares.”

It is clear enough that Kleinman didn’t have to hack a Russian telephone or have private detectives rifle through the wastepaper bins at Sistema, Bashneft or Russneft for this scoop. It was apparently given to him in broad daylight, quite possibly without Murdoch-style favours, by “people close to Hayward”.

Look again – they are claiming that Hayward, Rothschild and the Vallares shareholders believe they can borrow against their capital pot of £1.3 billion, paying roughly six times that amount for £8 billion in Russian asset value. A report by oil analyst Alexei Kokin of Uralsib Bank suggests the arithmetic is wishful. “Sistema owns 86% of the common shares and 73% of the capital in Bashneft (together with Sistema-Invest) and 49% of Russneft. The deal could create a Russia-based oil company with proven reserves of about 2 bln bbl and a production rate of above 550,000 bpd. Total value of the stakes could be $9.5 bln [£5.9 billion]. Bashneft’s total market cap is $11 mln (ords and prefs), with Sistema’s stake (including Sistema Invest) worth $8 bln at Friday’s closing price [[£5 billion]. We believe the value of 49% in Russneft should not exceed $1.5 bln under the most aggressive valuation assumptions.” Russneft’s burden is its estimated $6 billion in debt. Two-thirds of that are owed to Sberbank. One-third of the debt is owed to recently listed Glencore; Hayward sits as a “senior independent non-executive director” on the Glencore board.

But there is a problem that Murdoch-style hacking and bribery of government officials might have uncovered, if only Kleinman had given them a try. He might have discovered that the purported Russian targets of Hayward and Rothschild have no intention of selling, and that even if the thought had crossed their minds, the Deputy Prime Minister in charge of the oil sector, Igor Sechin, and the Control Commission, chaired by Prime Minister Vladimir Putin, have not signaled in advance their intention to allow a foreign acquisition of this size.

Yevtushenkov (right) and his associates not only say they aren’t selling. They dismiss the Sky News report as “all rumours”, intimating there has been no negotiation with either Hayward or Rothschild or their associates.

This is not the first time Rothschild has advertised his corporate governance record and his standing as a passport holder on the London Stock Exchange for Russians who do not qualify for the credential in the usual way. The story of how Rothschild launched Vallar a year ago, and then settled on an Indonesian coal miner instead of his Russian targets has been told in detail.

At least in that fly-by, there were multiple sources in London and in Moscow, as well as in Boston, who claimed to know a lot about the deal negotiations before they were abandoned. For this fly-by, there is noone but Hayward, Rothschild, and his partners. Rothschild’s spokesman was asked to say whether he or his associates at Vallares have had conversations with Vladimir Yevtushenkov in relation to asset acquisitions for the Vallares vehicle? And when was the last time Mr Rothschild spoke with Mr Yevtushenkov? An answer may be on its way, but hasn’t arrived by the close of business today.

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