Shares in OAO Surgutneftegaz, Russia's fourth-largest oil producer, fell 3.9 percent today after a report the company's pension fund took control of some of its treasury stock.
The newspaper Vedomosti reported today that Surgutneftegaz's pension fund acquired OOO Leasing Production, a unit of the oil company that once held 42 percent of the oil company's common shares. The newspaper cited the national company register. Neither Surgut nor Leasing Production, a limited liability company, reports who owns those shares now, Vedomosti said.
Surgutneftegaz spokesman Igor Zakharko declined to confirm or deny the report in a phone interview with Bloomberg. A 42 percent stake in the common stock of the Surgut, Russia-based company would be worth almost $20 billion based on today's share price.
Citigroup Inc. said it may slash its target price for Surgut should the acquisition be confirmed, since it would mean the securities could no longer be considered treasury shares, Andrei Machanskis, a Moscow-based analyst for Citigroup, said in a report to clients today. Treasury shares can't be voted.
The acquisition could lead to a downgrade in Surgut's price estimate of as much as 30 percent, partly depending on how much the stake changed hands for. Machanskis said. He rates the shares a ``hold,'' with a price estimate of $1.63.
Moscow-based Alfa Bank later in the day downgraded the shares to ``sell'' and cut the target price 19 percent to $1.13.
The shares lost 1.39 rubles or 3.9 percent, trading at 34.168 rubles ($1.29) after falling as much as 4.7 percent at the end of the day.
Investor perception has gone from ``terrible to really, really terrible,'' said Adam Landes, a London-based oil and gas analyst at Renaissance Capital. The investment bank rates the shares a ``buy'' with a target price of $2.13.
Investors including Hermitage Capital Management and Firebird Management LLC sued Surgut in 2004, claiming 62 percent of the company's shares should be considered treasury shares and canceled because they were held by the company's own units.
Shares of Surgut jumped 6.3 percent on Moscow's Micex stock exchange on Dec. 5, their biggest gain in almost six months, after Deutsche Bank AG's Moscow-based analysts said state-run OAO Rosneft may want to acquire the company.
To contact the reporter on this story: Torrey Clark in Moscow at firstname.lastname@example.org.
To contact the editor responsible for this story: Daniel Tilles at email@example.com.