Russian investor gets right to buy Lyondell stake
Fri May 11, 2007 11:33am ET
NEW YORK, May 11 (Reuters) - U.S.-based Russian billionaire Leonard Blavatnik signed an agreement giving him the right to buy an 8.3 percent stake in Lyondell Chemical Co. for $674.05 million, and the company's shares surged 12 percent.
According to a regulatory filing Friday, Blavatnik's AI Chemical Investments made a forward contract agreement with Merrill Lynch & Co. Inc. giving the company the right to buy 20,990,070 shares of Lyondell for $32.113 per share.
"Mr. Blavatnik will continue to evaluate his right to acquire a stake in Lyondell. Any future actions in regard to any investment would depend on many factors, including developments in the petrochemical industry, Lyondell and general market conditions," a spokesman for AI Chemical said.
The spokesman described the stake as being "strategic."
Blavatnik is the founder of Access Industries, a privately held, U.S.-based industrial group which counts among its investments plastics company Basell Holdings BV, BP Plc's Russian oil affiliate TNK-BP Holding, aluminum producer UC RUSAL and Warner Music Group Corp.. AI Chemical is a newly formed unit of Access Industries.
On the latest Forbes billionaires list, Blavatnik ranked 6th among the top 10 richest New Yorkers, with more than $7 billion to his name.
Occidental Petroleum Corp. said earlier Friday that it plans to sell its 8.3 percent interest in Lyondell, or just under 21 million shares.
The oil company said it sold about 7 million shares to a single buyer in a private deal for more than $32 a share.
Occidental said it entered into an agreement that will allow it to receive a similar price for its remaining 14 million shares and intends to sell those shares in the open market.
Occidental expects to pull in about $520 million in after-tax proceeds and record a net gain of about $200 million from the sales. The company had already sold off around 10 million Lyondell shares late last year.
Lyondell shares were up $3.78 to $36.85 on the New York Stock Exchange. Earlier in the day, the shares hit $38.23, a new lifetime high.
Lyondell in February agreed to sell its titanium dioxide pigment business to an affiliate of Saudi Arabia's National Industrialization Co. for about $1.2 billion, after deciding last year that it would rather invest in its refineries.
The company could not immediately be reached for comment.
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