Bloomberg reports Mr Delcommune, CSO of MOL, as saying that his company might be more careful with further acquisitions after completing 12 deals in the past few years. He added that the next five years might go without any acquisition, and they hope that the future will justify their cautious strategy.
Mr Delcommune only highlighted NIS as a potential target in the foreseeable future, and failed to mention Croatian INA, the strategically most important target of MOL, or Pakistani Petroleum Ltd, where MOL is one of the four standing bidders. According to our information, MOL is also eyeing Romanian state-owned gas producer company Romgaz.
The moderate announcement might be considered as a message to investors, in order to calm down expectations on acquisitions in the short-run, especially regarding INA. According to our information the privatization process of the Croatian company has suffered a significant delay, due to unknown legal/technical obstacles, which, in the light of the general elections next year, might raise concerns as to when, exactly, MOL can extend its current 25% stake to a majority.
We expect a slight negative share price reaction to the news, since MOL practically admitted its lack of acquisition possibilities. As a consequence of this, MOL might increase its dividend payment but we haven’t heard any specific plan yet.