PKN Orlen Plans to Raise Stake in Unipetrol to over 90%

Prague, Dec 13 (CTK) – Polish group PKN Orlen, a majority owner of Czech petrochemical company Unipetrol, has notified Unipetrol of its launch of a voluntary public offer to purchase further Unipetrol shares, planning to raise its stake from the current 63 percent to at least 90 percent, Unipetrol told CTK today.


PKN Orlen is offering Kc380 per share.


Paulinino Limited, the biggest minority shareholder of Unipetrol, regards the offer as a logical step. “We are analysing it,” Paulinino’s representative Pavel Muchna said.


Paulinino Limited is owned by Czech-Slovak investment group J&T.


“The (Unipetrol) Board of Directors will prepare its opinion regarding the offer within 5 business days of receipt of the bid document,” Unipetrol said.


The subscription period will commence on December 28 and end on January 30. The settlement of the transaction is scheduled for February 23, 2018.


PKN Orlen has reserved the right to waive the condition of reaching the threshold of at least 90 percent, Unipetrol said.


Around 16:00 today, Unipetrol shares were trading at about Kc377 apiece on the Prague Stock Exchange (BCPP). Since the open, the price has risen by 3.3 percent, however, in the afternoon it stagnated. A year ago it was approximately twice lower.


PKN Orlen said it aims to buy all Unipetrol shares and have the company delisted from the Prague bourse.


For this to achieve it needs to acquire at least 90 percent of the company, which would cost it Kc18.6bn at the offered price of Kc380 per share.


“The J&T group holds a blocking stake. If PKN wants to increase its stake above 80 percent, it will have to reach an agreement with J&T. J&T thus has a strong negotiating position,” BH Securities analyst Martin Vlcek told CTK.


The price of Unipetrol shares is relatively low in comparison with comparable companies in the industry, he noted.


“During potential further rounds of the buyout or negotiations, the price of Unipetrol may theoretically rise by 30-40 percent. The scenario may therefore be similar as in the case of Fortuna – another round of buyout at a higher price,” Vlcek said.


“We see the offered price of Kc380 per share as a fair price given the recent and current developments in the refining sector in the Central European region,” said Patria Finance chief analyst Tomas Sykora.


Kamil Kliszcz, the main equity analyst with Poland’s DM mBank, considers it a strategically correct offer, too, Patria said.


Polish server Puls Biznesu said in June that PKN Orlen would like to take over J&T’s stake in order to end internal disputes in Unipetrol.


Unipetrol has been part of PKN Orlen since 2005.


Paulinino Limited, which holds about 20 percent in Unipetrol, has been criticising the Unipetrol management for the purchase of Spolana chemical company, among other things.


Last year, Unipetrol raised its net profit by almost Kc1bn to a record amount of Kc7.98bn and its sales amounted to Kc87.8bn.


Unipetrol’s share capital equals Kc18.133bn.


Unipetrol, focusing on crude oil processing, fuel distribution and petrochemical production, is one of the biggest Czech companies in terms of sales, regularly placing among the first ten in the Czech Top 100 chart.