In an effort to stem a possible counter-bid by China's Sinopec and others, ONGC [Get Quote] Videsh Ltd, the overseas exploration subsidiary of state-owned Oil and Natural Gas Corporation, has through its advisor Deutsche Bank approached the large institutional investors of Imperial Energy to acquire their holdings.

The top 10 institutional investors together own 50.52 per cent in the company (see table).

Talking to Business Standard, a senior official of one of the institutional investors said, "We have received a request from their advisor for a definitive agreement to sell their holdings at around 1,350 pence with a condition that it be re-negotiated if the counter bid is 10 per cent above this price."

If the counter-bid is within 10 per cent, the agreed price would be the final bid, the official added.

Prospecting for shares
Major shareholders of Imperial Energy	(In %)
Baillie Gifford	11.86
Schroders -	9.05
Deutsche Bank	6.84
Peter Levine (CEO)	6.13
Legal & General	4.65
London & Amsterdam	3.46
Directors of IEC	3.16
Sloane Robinson	2.78
HBOS	2.59
Blackrock	2.39
Source: Bloomberg

Deutsche Bank already holds 6.84 per cent in Imperial Energy, but whether this is on behalf of OVL or other investors could not be verified.

"OVL will make a formal bid early next week. It is a negotiated deal in which the management has extended full support," a source close to the development said.

After this, it will take around a month to obtain shareholders' approval, sources said. A counter-bid can be submitted anytime during this period, they added.

The proposed deal has received support from the Russian government, which is critical for any new bidder, sources in government said.

The official said OVL may rope in Russian support by offering its state-owned companies, such as Rosneft, a stake in Imperial Energy after completing the transaction.

In 2006, Sinopec gave Rosneft 51 per cent in Siberian oil company Udmurtneft after it bought the company from TNK-P for $3.5 billion.

Russia recently started nationalising its natural resources with its state-owned companies buying a majority stake in oil and gas assets such as the Sakhalin II project in the country's far-east.

Rosneft and Sinopec are also jointly developing part of the Sakhalin III project, in which OVL is also seeking a stake.