Hayward’s bid vehicle completes oil deal

The bid vehicle of former BP chief executive Tony Hayward and financier Nathaniel Rothschild completed its controversial $2bn acquisition of Kurdistan-focussed Genel Energy yesterday, with corporate governance concerns weighing on the shares.
By The Newsroom
Published 22nd Nov 2011, 09:53 BST

Worries about the partners Hayward had taken on, and a rise in risk aversion among investors, amid market turbulence, outweighed positive news flow around Kurdistan since early September when the deal was announced and the shares suspended.

“Given the positive news around the Exxon deal, you would have expected the shares to move up,” said Tim Hurst-Brown, oil analyst at Mirabaud Securities.

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“There may be a corporate governance concern among some people and the risk environment is different now than when the deal was agreed,” he added.

Hayward was seen to have bought oil reserves for a modest price, analysts liked his plan for further acquisitions in the region and a deal between the regional government and Exxon Mobil lifted other Kurdish explorers’ shares, as it was seen to be the prelude to an end to an impasse on oil revenue sharing.

The shares were also expected to get a lift from the fact the company expects to enter the FTSE 100 index of the UK’s largest companies, which means passive, tracker funds will be forced to buy its shares.

The deal marks Hayward’s return to a senior management role in the oil business after being forced out of BP following the Gulf of Mexico oil spill.

He will be the CEO of Genel Energy.