Permira has finished the first part of due diligence at BorsodChem. The private equity company is now evaluating the data and is going to decide whether to call its buy option on a 52% stake in BorsodChem, the CFO of the chemical company told business daily Napi Gazdaság. The option expires in October, however, Mr. Illéssy expects and earlier decision saying that Permira was fine with the data it found.
Our view: The market generally expects Permira to call the options. We are a bit more cautious here, still seeing some chance for a non-exercise on the back of worsening outlook for commodity petchems. In the event of a non-exercise, the stock price will fall back substantially, so we recommend selling the shares into the market.