The Polish PKN Orlen submitted the only bid for Unipetrol, the total amount being CZK 13.05bn, out of which CZK 11.304bn, i.e. CZK 98.96 per Unipetrol share, is for the state's 62.99% stake in the holding, CZK 1m for the state's 9.76% stake in Spolana (Unipetrol's 82% subsidiary), and the remaining amount of CZK 1.745bn for receivables towards Unipetrol subsidiaries Aliachem, Paramo, Spolana and Benzina. The bid is unconditional and has been submitted independently by PKN, the National Property Fund said. Mol Hungarian Oil & Gas and Shell Europe Oil Products failed to bid. Source: Czech Press Agency (CTK).
While the total offered amount is largely in line with previous unofficial indications cited in the local press, the bid for Unipetrol's equity is significantly higher than was expected and than was Friday's close (CZK 69.14) and exceeds our fair value estimate for the Unipetrol stock (CZK 93). Strongly positive.
The privatization committee should officially recommend PKN as the privatization winner to the government today; the National Property Fund (NPF) will propose the winner on Tuesday, April 27. The government is expected to approve PKN Orlen as Unipetrol's new owner at the end of April or beginning of May. As (i) the NPF deputy chairman P. Kuta said that the bid for Unpetrol's equity is in line with the internal appraisal from the privatization advisor McKinsey and (ii) the government is in imminent need for additional budget revenues, PKN is very likely to be approved by the Cabinet as Unipetrol's new owner. The only issue might be the price offered by PKN for Unipetrol subsidiaries' debts with their nominal volume of CZK 4.5bn towards the state-owned CKA agency (39% of the nominal volume); CKA is scheduled to discuss the bid this afternoon. Source: CTK. LN daily.
Under Czech legislation, the sale of the state's majority stake would trigger an obligatory buyout offer. Based on the above information, the buyout price must not be lower than 85% of the purchase price, which would correspond to CZK 84.12 per Unipetrol share. Note the PSE suspended trading with Unipetrol shares today.
Jan Hajek