Eurasia Drilling Slumps as Russia Fails to Rule on Schlumberger
(Bloomberg) -- Eurasia Drilling Co. dropped the most in 3 1/2 months in London trading after Russia failed to rule on a planned purchase of the company by Schlumberger Ltd.
Eurasia’s global depositary receipts tumbled as much as 10 percent, the biggest decline since Feb. 20, to $18.10. Trading volumes were 60 percent above the three-month daily average.
Russia’s foreign-investment commission met Thursday yet didn’t make a decision on Schlumberger’s bid, Natural Resources Minister Sergei Donskoi said by phone, without giving a reason. Investors had hoped a ruling would clear the way for the deal’s $1.7 billion first phase, which has already been delayed months.
Schlumberger, based in Houston and Paris, announced the planned purchase in January as the U.S. and Russia faced off over President Vladimir Putin’s support for a separatist insurgency in Ukraine. U.S. and European sanctions on Russia include curbs on exports of drilling technology.
The acquisition was pushed back as Russia’s antitrust authority sought additional information. That led Eurasia to miss a February deadline for completing the first phase, under which core investors would buy out the 45.65 percent held by minorities at $22 a share. At a later stage Schlumberger would gain an option to acquire the rest.
A discussion of the bid was originally on the commission’s agenda for Thursday, two officials said earlier this week. It was unexpectedly removed before the meeting, RBC reported, citing two unidentified people with knowledge of the matter.
Eurasia traded down 7.2 percent at $18.75 as of 3:34 p.m. London time.
“The government probably decided to be more cautious amid rising tensions in Ukraine and statements from U.S. and EU politicians on extending sanctions against Russia,” said Ildar Davletshin, an energy analyst at Renaissance Capital in Moscow.
Natalya Timakova, a government spokeswoman, didn’t respond to phone calls and messages seeking comment.
Eurasia, Russia’s No. 1 driller, acquired OAO Lukoil’s drilling arm in 2004 and retains the oil producer as its largest client.
--With assistance from Dina Khrennikova and Andrey Biryukov in Moscow.
To contact the reporters on this story: Elena Mazneva in Moscow at firstname.lastname@example.org; Stephen Bierman in Moscow at email@example.com To contact the editors responsible for this story: Will Kennedy at firstname.lastname@example.org Amanda Jordan, Randall Hackley
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