Rosneft Agreed to Acquire TNK-BP Joint Venture

Nichole Harper
22 Oct, 2012
New York City

Stocks in New York were flat in a choppy session after Caterpillar lowered its outlook on weak economy. Peabody, the largest coal miner jumped after it revised higher annual sales outlook. Russia based Rosneft agreed to acquire the entire joint venture BP-TNK.

[R]10:35 AM New York – Stocks in New York were flat in a choppy session after Caterpillar lowered its outlook on weak economy. Peabody, the largest coal miner jumped after it revised higher annual sales outlook. Russia based Rosneft agreed to acquire the entire joint venture BP-TNK.[/R]

Stocks in early trading in New York were generally on the defensive after Caterpillar cut its guidance on weak economy.

Technology, utilities and industrial companies traded lower at the opening after Caterpillar reported higher than expected earnings but reported revenues that were below expectations and also lowered its annual outlook.

Hasbro ((HAS)) reported quarterly earnings that were ahead of estimates but sales lagged on a weakness in revenues at its pre-school children product lines.

Peabody Energy ((BTU)) soared more than 12% after the largest coal miner reported earnings that were ahead of expectations and lifted the lower end of the year full-year earnings and estimated higher than expected annual earnings outlook.

The coal miner lifted its full-year sales outlook to between 240 million and 250 million tons from its July estimate between 230 million and 250 million tons.

Peabody also said it is targeting adjusted earnings per share between $2.10 and $2.30 a share in the current year.

Revenues in the quarter jumped 3.9% to $2.06 billion and net profit declined to $42.9 million or 16 cents a share from $274.1 million or $1 a share.

Caterpillar ((CAT)) said third quarter net rose 49% to $1.7 billion or $2.54 a share compared to $1.14 billion or $1.71a share. Revenues in the quarter increased 4.6% to $16.45 billion.

The construction and mining equipment maker said it now estimates 2012 revenues of $66 billion and net income between $9 billion and $9.25 billion a share.

Freeport McMoran ((FCX)) opened higher after the metals and mining company reported quarterly earnings and revenues ahead of expectations.

Russia Controlled Rosneft to Buy TNK-BP Venture

Russia controlled OAO Rosneft today reached agreement to acquire oil joint venture between BP PLC and a group of Russian-born billionaires.

Under the terms of the deal, BP will sell its 50% stake in the joint venture for $17.1 billion in cash. And, BP will use $4.8 billion of cash to acquire additional 5.66% stake in Rosneft from the Russian government.

BP currently holds 12.84% stake in Rosneft and after the deal will increase its stake to 19.75%. The deal to acquire additional stake is conditional on the willingness of Russian government to the sale of additional stake in Rosneft.

The deal brings a windfall return to BP of $19 billion after it paid around $8 billion in 2003 for the stake in 2003.

With the deal, Russian President Vladimir Putin tightened the grip on the oil sector that generates 50% of the state revenues and also frees BP to explore on its own or in other partnership in the Arctic region.

Ancestory.com Agrees to go Private for $1.6 Billion

The online genealogy site, Ancestory.com, agreed to today to be acquired by the European private equity firm Permira for $1.6 billion.

The purchase price of $32 a share is a 9.7% premium from the closing price on Friday.

The price is also more than 40% higher from the closing on June 5 after the company said it hired Qatalyst Partners as an adviser to evaluate company options including the sale of the company.

According to the terms of the deal, the company chief executive Tim Sulliva and chief financial officer Howard Hochhauser will retain majority stake and funds affiliated with Spectrum Equity will together retain approximately 30% stake in the company.