Koc-Shell group makes top $4.14 bln Tupras bid

The bid was well above market expectations and amounted to 81 percent more than the market value based on Friday's closing price of 24.0 new lira. Tupras is the only domestic refiner, with annual capacity of 27.6 million tonnes.

It was the second largest Turkish sell-off after the $6.55 billion sale of a 55 percent stake in landline company Turk Telekom this summer and gave a fresh boost to the country's privatisation programme.

Following the group's final bid on live television the other remaining bidder, a joint venture of Indian Oil Corp and Turkey's Calik Enerji group, said it was withdrawing from the auction. Koc Holding has an 80 percent stake in the joint venture, Shell has a 10 percent stake, Turkish Aygaz has seven percent and Opet Petrolculuk three percent.

The head of the energy division at Koc Group, Erol Memisoglu said the venture would discuss with the Privatisation Administration the form of payment for the stake.

"Our aim is to bring Tupras forward and to make it a major player in the Mediterranean," he told the tender meeting after the auction was completed.

The auction results will now be assessed by the sale tender commission and then will be submitted to the competition board for approval before being sent on to the state's High Board of Privatisation for final approval.


FRESH UNION CHALLENGE

A previous $1.3 billion attempt to sell the refiner failed last year due to a legal challenge by labour unions.

After the completion of Monday's tender, labour union Petrol-Is said it would launch legal action on Tuesday to halt the new sale process.

"We will open a lawsuit tomorrow with the intention of blocking the result of the tender... In our view, what is being sold is not Tupras but the country's most valuable asset," union leader Mustafa Oztaskin told Reuters.

In total, nine bidders took part in Monday's tender which began with four rounds of closed written bids, during which three of the bidders were eliminated: Hungarian oil and gas company MOL , Italy's ENI and the PKN Orlen -Zorlu Holding group.

In the subsequent auction, Austria's OMV , Anadolu group, the Petrol Ofisi -TAC venture and OYAK withdrew, leaving two bidders remaining.

The Istanbul Stock Exchange earlier suspended trade in Tupras pending the results of the tender. The bourse also suspended trade in fuel retailer Petrol Ofisi , Koc and Aygaz .

Tupras achieved a consolidated net profit of 293.18 million new lira ($215 million) in the first half of 2005, up from 182.94 million a year earlier.

Source: Reuters