London-based private equity fund Vallares has moved closer to a reported multi-billion pound takeover of Turkish oil explorer Genel Enerji, a source close to the situation has told Reuters.
The source said Vallares, run by ex-BP CEO Tony Hayward, is more favourable towards Iraq-focused Genel Enerji than other assets it has looked at, such as projects in Russia. The fund was also been linked to an acquisition of all or part of Dana Gas last month.
A second source close to the talks told Reuters that Genel was now close to a deal and expected to make a statement in the first half of September. A transaction could be announced in the coming weeks, the source said. However the deal has not been finalized and could yet fall apart.
The founders said they planned to carry out a transaction — possibly a reverse acquisition — within two years of listing but sources close to the group said it ideally would like to agree on a target by the autumn.
Genel Enerji was valued at between $3.3 billion and $3.6 billion in 2009 during merger talks with Heritage Oil which eventually broke down.
The exact structure of the deal under discussion is unclear, but on completion Hayward, hedge fund manager Nathaniel Rothschild and the other founders are set to receive generous share awards.
Genel Enerji agreed to merge with London-listed Heritage Oil in 2009, but Heritage pulled out of the deal after Britain’s financial regulator fined Genel Enerji boss Mehmet Sepil for insider trading in Heritage’s shares.
In June, Vallares raised 1.35 billion pounds ($2.2 billion) from investors to target emerging-market oil assets, marking Hayward’s return from the business wilderness after he left BP following last year’s Gulf of Mexico oil spill.
