“BP Plc (BP/) will buy back $8 billion of shares from investors after completing the sale of 50 percent of Russian oil producer TNK-BP.
BP’s first buyback since 2008 will return the original amount invested in the venture 10 years ago, the London-based company said in a statement today. The sum is twice as much as Chief Financial Officer Brian Gilvary signaled last year would be enough to offset earnings per share lost from selling the stake in Russia’s third-largest producer.
The deal to sell out of TNK-BP gives Chief Executive Officer Bob Dudley a fresh start in Russia after a fractious 10- year partnership with a group of billionaires. BP shares have slumped since the 2010 Gulf of Mexico oil spill and the company faces fines after a trial in New Orleans.
“This shows confidence for BP,” said Iain Reid, an analyst at Jefferies & Co. in London. “It makes them more shareholder-friendly, but I don’t think they’ll recover their luster until the Macondo trial is over.”
BP rose as much as 2.8 percent and traded at 461 pence as of 8:01 a.m. in London.
After selling its TNK-BP stake to OAO Rosneft (ROSN), BP will become the second-biggest investor in Russia’s largest oil company with a 19.8 percent shareholding. Following the buyback, which will take eight to 12 months to complete, BP will retain $4.5 billion in cash from the deal….”
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