Patria yesterday downgraded its recommendation for Unipetrol to hold from buy and reiterated its target price of CZK 93 per share. The share climbed strongly following the announcement of the winning bid in the privatization, partly reflecting investor expectations on a future buy-out price and Unipetrol’s risk-adjusted post-privatization restructuring potential. At present, neither has been sufficiently attractive to warrant a buy recommendation.
Separately, PKN Orlen should sign the Unipetrol purchase agreements on May 26 and pay an advance of CZK 1.3bn, i.e. 10% of the purchase price.
Jan Hájek