IPE Turns to Outside Investors, Including Enron, British Gas
The board of directors for the London-based International Petroleum
Exchange urged its members last Wednesday to accept a buy-out offer from
five outside investors including British Gas, Distrigas, Enron, Nord Pool
and OM Group, rather than accept a proposed merger bid from the New York
Mercantile Exchange. The 475 members of the IPE will vote on the sale at
an extraordinary general meeting held on July 30. The board threatened
to resign if the outside investor sale failed.
Through combined efforts, these five companies have offered the IPE
$25 million pounds (U.S. $38.99 million) for 70% of the exchange. The companies
made the offer in an open tender which closed in May. A simple majority
of the membership needs to vote in favor of the sale for the outside investors
to be successful.
The board support for the sale is a setback for NYMEX, which has been
in merger discussions with the IPE since late last year (See NGI, Nov. 23, 1998). Earlier this year, the U.S. exchange
tendered an offer that was rejected by the IPE. Last week, NYMEX increased
the valuation of its offer to $19.6 million pounds for 55% of IPE. Under
the NYMEX proposal, the IPE would maintain a 30% interest.
"NYMEX made the IPE an offer that was identical financially to
the outside investor proposal and, in our opinion, was far superior from
a qualitative and strategic perspective," NYMEX said in a statement.
The NYMEX and the IPE account for almost all global energy futures trading
with NYMEX being the larger of the two. Both trade futures on crude oil,
petroleum products and natural gas.
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