PKN Orlen on Friday 26 agreed to buy 84.36% stake in Mazeikiu refinery from Yukos and Lithuanian government for US$ 2.34bn. The structure of the deal is the following:
- PKN buys 53.7% of Mazeikiu from Yukos International UK B.V. for US$ 1.492b (US$ 3.927 per share) with fixed purchase price and no adjustments at closing
- 30.66% of the stake is bought from the Lithuanian Government for US$ 852m (US$ 3.927 per share) with fixed purchase price and no adjustments at closing.
- Additionally Lithuanian Government has a put option to sell 10% of Mazeikiu refinery to PKN Orlen within 5 years. If the option is exercised within 3 years from the closing of the 30,66% stake, the price will be US$ 284m (US$ 4.0205 per share), if exercised after 3 years – PKN Orlen will acquire the stake for US$ 278m (US$ 3.927 per share)
- For the remaining 5.7% stake (free float) a mandatory tender offer will be launched.
The agreement to sell the state-owned stake should be approved by Lithuanian parliament by 10 July 2006. PKN held a conference call on Friday evening where the CEO expressed his confidence that the decision of the Lithuanian parliament would be positive, as the opposition also supports it largely. Since the European Commission should also give the green light to the deal, completion of the transaction is only expected by 1Q07.