India's ONGC bids for Imperial Energy

By Tom Bergin

LONDON (Reuters) - India's biggest oil producer, ONGC (ONGC.BO), said it had agreed a 1.4 billion pounds takeover of Russia-focused Imperial Energy IEC.L on Tuesday in a bid to secure supplies for India's booming economy.

State-owned ONGC beat China's Sinopec to snatch the British-based oil explorer, though sources close to the deal said the Kremlin would likely expect ONGC to sell a stake on to a Russian state oil group such as Rosneft (ROSN.MM).

Imperial Energy said that ONGC's overseas arm, ONGC Videsh, would pay 1,250 pence in cash for each of its shares.

"This is a good price, given consideration for the current softening in oil prices, the turbulence on global stock markets and the geopolitical stage," brokerage Daniel Steward said in a research note.

Shares in Imperial, whose assets are mainly in the Tomsk region of Siberia, traded down 2.1 percent at 1,214 pence at 3:54 p.m., suggesting investors do not expect a rival bid.

Last month, Imperial reported it had received a 1,290 pence/share approach from an unnamed bidder, which sources familiar with the matter identified as ONGC.

A subsequent approach from another party, which sources identified as Sinopec, sparked hopes of a bid battle.

But Sinopec downplayed talk of a bid on Tuesday and sources close to the deal said the state-owned oil refiner had done little due diligence despite being invited to do so.