Today, Unipetrol may get a green light for two acquisitions, neither of which we consider particularly value-enhancing, at least not in the short-term. First, Cabinet is to select today the buyer of its 71% stake in Paramo, a small domestic refinery. Among the short-listed bidders are Norex of Canada (offering CZK 403 per Paramo share), Unipetrol (offering a CZK 150 per share) and Cepramo (offering CZK 1 per share). Norex Petroleum is indeed offering the highest price, but may not win the tender. There is pressure in the Cabinet to fold Paramo into Unipetrol. The acquisition of Paramo would expand Unipetrol’s refinery capacity and range of Unipetrol products. However, at Unipetrol’s bidding price (CZK 150 per share), Paramo is valued at a 4.2x EV/EBITDA, which we do not find cheap for such a company.
(ii) Separately, Cabinet is today scheduled to discuss Aliachem. The Chemapol Group bankruptcy administrator is currently selling a 49% stake in Aliachem. Two weeks ago Cabinet refused to allow the state Konsolidacni banka to increase its bid for the stake in Aliachem and it seems that the stake will be sold to Agrobohemie, 50% owned by Unipetrol. It is not clear what the precise outcome of the cabinet’s Aliachem discussion today should be, but an endorsement of Unipetrol’s bid in any form would likely lead to the administrator’s decision to sell Aliachem to Unipetrol. Given that the benefits to Unipetrol in acquiring Aliachem (synergies, etc.) would be only long-term, while the costs (restructuring costs, cost of extra debt) would be more short-term, the stock might suffer as a result of such a decision.
(Ondřej Daťka, Ladislav Kovář)