Mr. Schmalz, responsible for CEZ’s acquisitions, stated for Reuters that there are no problems in the negotiations with the Bulgarian government concerning the purchase of TPP Varna. Both parties could finish talks in April. The Varna power plant is the second biggest in the country. The tender was originally won by Russian UES, while CEZ's bid came in second. However, UES refused to sign the contract, prompting the Bulgarian government to commence negotiations with CEZ. CEZ offered EUR 287m implying an EV/EBITDA of 22x compared with UES’s EUR 578m, an implied EV/EBITDA of 44x. We believe that Bulgarian transaction is expected and should be neutral for today’s trading. We reiterate our Hold recommendation for CEZ.