MOL has exercised its option on May 8 to buy 10.89 million MOL shares (or 10% stake) from the State Privatization and Holding Company (ÁPV). The per share price of the transaction was calculated based on the volume weighted average stock exchange price in the 90 trading days proceeding May 8, excluding two own share transactions at HUF 21,800 per share. The total purchase price amounts to HUF 237bn.
We see the news as neutral, as we see MOL's purchase of own shares as expected. However, the transaction implies that MOL will most probably establish a partnership if buying a Russian upstream company Udmurtneft to lower the financing need of the project. We see this positively, as establishing a partnership would also lower risks MOL could take. The transaction also implies approximately a 10% higher dividend per share, as MOL will not pay a dividend on its treasury shares, but will distribute it instead among the other shareholders.