MOL filed preliminary bids for majority stakes in Pakistan's two natural gas distributors, along with 16 other potential bidders. Other major bidders are BP, Shell and Mitsui, but many other local/international companies expressed their interest.
Pakistan's government has decided not to sell the stakes in both the gas distributors to one bidder to avoid monopoly, the country said in an official statement. The two companies are listed on the Karachi Stock exchange, and have a combined market cap of some USD 1.5bn.
Recall that MOL recentmy put on stream its Pakistani gas fields, and we believe it is the main driver for the decision to participate in the bid. In our view, MOL is much more interested in the due diligence for the transmission part of the company than really buying stakes in a utility company, to better understand the cost structure of this segment of the business, and position themselves for potential negotiations in the future.
We see the news as neutral to the today’s trading, and we keep our Buy recommendation on the stock with our target price of HUF 25,730.