Broker snap: Investec reiterates 'buy' on BP after Rosneft deal

Investec has maintained its 'buy' rating and 460p target price for oil titan BP after announcing a deal to sell its stake in the TNK-BP joint venture to Rosneft.As part of the deal, BP receives $17.1bn in cash and additional shares in Rosneft. BP then intends to use $4.8bn of this cash to purchase a further 5.66% of Rosneft from the Russian government, reducing the amount of cash to $12.3bn. Post the deal, BP will hold a 19.75% stake in Rosneft and will have two seats on the board.Investec said: "The deal will be viewed positively as it halves exposure to Russia whilst upgrading BP's partnership and reviving hopes of an Arctic entry.""[...] BP is promising to offset the dilution effect of the deal and, whilst this is unlikely to be implemented before a Gulf Settlement, this could be around $10bn, we think."Shares were down 1.87% at 442p by 15:18 on Monday.BC