Sibir Energy's troubled existence as an independent company is almost over after its board agreed a takeover offer from the oil arm of Gazprom.
Gazprom Neft, which owns about 27% of the Aim-listed Russian oil producer, has made an approved offer of 500p per share for the remaining publicly held shares, valuing Sibir at around $3bn (Ј1.88bn). If, as is likely, Sibir shareholders agree to sell, Gazprom Neft would own about 35% of the company, making it the largest shareholder.
The majority of Sibir's shares are held by Russian tycoons Chalva Tchigirinski and Igor Kesayev, who together own about 47%. The city of Moscow also holds about 18% of the company.
The Kremlin wants to control a greater share of the oil and gas industry making the activities of independent energy companies – particularly from overseas – increasingly precarious.
The board of Sibir has waived takeover rules which require the holder of more than 30% of a company's shares to make a full offer for the rest.
Gazprom Neft is expected to begin negotiations with the trio of private shareholders to complete the takeover.
Shares in Sibir have been suspended since February over property deals undertaken by Tchigirinski, its then chairman, and former chief executive, Henry Cameron, who are now being sued by the company.
It emerged that Sibir planned to buy property assets from Tchigirinski to help him meet margin calls on debts at a time when the credit crunch had badly hit his real estate empire.
Sibir discovered it was owed around $325m by Tchigirinski and is taking legal action to reclaim it.