The Czech Cabinet yesterday approved the sale of Ceska pojistovna (CP), the leading Czech insurance company, to the PPF financial group, which already holds a 52% stake in CP. The state and Komercni banka, who are jointly selling their 30% and 10% stakes in CP, respectively, will receive CZK 3,750 per CP share, only slightly below the price reported in the MFDnes newspaper yesterday (CZK 3,800), and well above yesterday’s market price of CZK 2,330 per share. This values KB’s 10% stake at CZK 1.28 bil. We estimate that the value of the stake in KB’s books could be CZK 0.87 bil. as of June 2001, implying an estimated CZK 0.41 bil. profit from the sale (CZK 11 per KB share). The fact that the Cabinet approved the sale so quickly was somewhat surprising, as further negotiations had been expected. The Cabinet decision is positive for KB stock, but given the strong gain by KB yesterday, we consider the news to be largely reflected in the current share price.
The National Property Fund expects to receive the CZK 40 bil. payment by Societe Generale for the 60% stake in KB within two weeks (Societe Generale should take over at KB’s EGM on October 8).
(Ondrej Datka)