According to the Czech daily HN, E.ON has bid CZK 2.4 bil. to the state for a 48% stake in JCE, one of the distributors that is to be acquired by CEZ as per the government’s energy-sector restructuring plan. E.ON’s bid amounts to CZK 2,608 per JCE share, while CEZ, according to the state proposal, would pay CZK 2,129 per share, which implies a 23% premium, which may be justifiable given that E.ON and associated companies would gain a majority in JCE after acquiring the 48% stake (CEZ would own only a 34% stake in JCE).
Nevertheless, the above points to the fact that, in our view, the low valuation of the distributors to be sold to CEZ is a potential problem. Potentially higher bids from foreign utilities for related assets could complicate the CEZ-state asset transfer beside possible legal challenges, and the possible negative stance of the Anti-Monopoly Office toward the transaction.
(Jiri Soustruznik)