Today is the deadline for the submission of preliminary bids for a 49% stake in Slovenske elektrarne (SE), Slovak dominant power producer. CEZ CFO D. Svojitka said that CEZ's approach regarding the privatization tender is conservative, and that CEZ sees the value of the minority stake "closer to red than to black" (recall that SE is highly levered, a possible state bail-out would, of course, increase the valuation of the equity). This view of CEZ is positive; the above indicates that CEZ is not going to bid aggressively.
Regarding other possible acquisition targets, CEZ also intends to bid for Bulgarian distribution companies, CEZ indicated the bid could reach EUR 200-300m. Recall the Bulgarian government grouped seven distributors into three groups and it reportedly expects the sale to fetch roughly EUR 270m in total (CTK). CEZ had said earlier that it would submit an indicative bid for one group only; the preliminary bids are to be submitted by end-January. We consider this plan neutral unless more details are known (e.g., what assets is CEZ bidding for, what are the privatization conditions, etc.).
Jitka Oppitzová