CEZ has been officially invited for exclusive talks over TPP Varna sale by Bulgarian Privatization Agency (BPA). Final contract needs to be signed within 60 day period. CEZ is prepared for rapid negotiations. Note that UES won the Varna tender, although it did not agree on several conditions with the Bulgarian privatization agency. CEZ offered EUR 287m for Varna, implying an EV/EBITDA of 22x compared with UES’s EUR 578m, an implied EV/EBITDA of 44x. The conditions on the sale of Varna to CEZ should be the same as at the time when CEZ submitted its bid. We are fairly optimistic about CEZ’s chances to eventually acquire the Varna power plant. We thus reiterate our Buy recommendation with fair value of CZK 864.