Chairman bought Aberdeen shares

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The Independent Online
GEORGE ROBB, the chairman of Aberdeen Petroleum, has admitted buying 500,000 shares in the oil group between it receiving a bid approach from a US group last month and telling shareholders about the bid yesterday.

He now faces an investigation by the Insider Dealing Unit of the Stock Exchange, which has taken note of the transactions.

Mr Robb, who last month stood down as chairman of the fund manager Aberdeen Trust, bought the shares between 24 December and 4 January at a price of between 6 3/8 p and 7 1/8 p.

Yesterday Bellweather Exploration Company, an oil group based in Houston, Texas, announced that it had made an approach to merge with Aberdeen on 14 December in a deal that it says would be worth 10 3/4 p per Aberdeen share.

Since then it has spoken to shareholders speaking for more than half Aberdeen's share capital about the offer and Aberdeen's share price has risen to close at 8 3/4p yesterday.

The model code governing the purchase of shares in quoted companies, as administered by the Stock Exchange, and the Company Securities (Insider Dealing) Act both prohibit the purchase of shares ahead of bids by anybody who would know about the offer. The code says: 'Dealing should not take place prior to the announcement of matter of an exceptional nature involving unpublished price-sensitive information.'

However, Mr Robb says he took advice from the accountants KPMG Peat Marwick and from the City lawyers Ashurst Morris Crisp, who said that the share purchases were entirely above board.

They advised that, as Aberdeen did not consider the approach to be a serious offer, it need not disclose it nor consider that it was price-sensitive information.

'Only a fool would have done this if it was not above board,' Mr Robb said. 'Our advice was that the bid was a non-starter and so there was nothing untoward about buying the shares.'

If the deal goes through, Mr Robb's profit will be about pounds 19,800.