According to Bloomberg, CEZ and other three companies (Enel, RWE and EVN) were short-listed in the tender for Macedonia’s only distribution company ESM. Initially, there were six companies that pick up the privatization documents. The tender condition includes investments of EUR42m over the next three years. The winner should be known in March. Based on previous tenders and the other bidders, we estimate the price for 100% of ESM at cEUR250m. We would view the acquisition as value-creative (subject to the final price paid) as CEZ has experience of integrating new acquisitions and restructructuring. We believe that the energy sector in the SEE region has a growth potential given the expected local GDP development. In addition, Macedonia borders with Bulgaria, where CEZ already owns three distribution companies and may potential realize more acquisitions. The news may have a slightly positive impact on the stock today. We reiterate our BUY recommendation.