The Slovak Finance Minister will probably again postpone his recommendation to the cabinet regarding the winner of SE tender until the end of this week. Note that the privatization advisor recommended Enel as the winner with a EUR 840m bid. CEZ came second with a bid of EUR 690m, while Inter RAO came third. CEZ reportedly submitted two bids, worth EUR 690m and 1.19bn (the latter subject to three conditions that the privatization advisor found unacceptable). While we must point out that the bids are very complex and only limited information is available to the public, we see CEZ's bids as too aggressive and therefore assess its failure to win the tender as positive news for the stock.
Separately, Parkiet, the Polish daily, reported on Friday that CEZ plans to invest around EUR 3bn on acquisitions in Central and Eastern Europe including Poland. The news should not come as a surprise as CEZ has already mentioned its plan to expand into the region.
Tomáš Gatěk, Patria Finance