Videsh, Imperial deal imminent?

NEW DELHI, Dec. 29 (UPI) -- A deal for the acquisition of British oil exploration firm Imperial Energy by Videsh Ltd. is 90 percent approved by shareholders as a deadline nears.

Videsh Ltd., a subsidiary of the Indian Oil and Natural Gas Corp. Ltd., announced in early December it offered $2.07 billion in a government-backed takeover bid, the first such attempt by the Indian firm.

Shareholders of Imperial voiced their approval of the measure despite limited market activity during the holiday season.

ONGC is not permitted to withdraw or reduce its bid, but if it fails to reach enough shareholder support, it can remove its interest in the deal. These rumors, markets concerns and the declining value of crude sent Imperial shares down 20 percent since the initial deal was tendered, The Financial Times reported Monday.

Observers note the Indian government is unable to walk away from the deal for fear of tarnishing its reputation as New Delhi scrambles to shore up domestic energy resources.

"Our position has not changed," said an ONGC statement. "We are well aware of our obligation to capital markets and shareholders."

Imperial boasts potential reserves of some 3.4 billion barrels held mostly in Russia. Shareholders have until Tuesday to accept the deal.