"Austrian oil and gas group OMV has announced on Tuesday that it has has begun a process of litigation against its Hungarian rival MOL in the Hungarian courts based on three elements of its Articles of Association which in OMV's opinion violate Hungarian laws:- the maintenance of the B share (“Golden Share") held by the Hungarian State which has a veto right regarding the removal of the 10% voting cap provided for in MOL's Articles of Association;
- the discriminatory nature of the cap of 10% on voting power which does not apply to the Hungarian State; and
- the constraint of removing only a limited number of Board members at any one time.
This litigation process has been initiated to reserve the rights which would otherwise expire towards the end of the year.
Portfolio's viewpoint:
Developments in the OMV-MOL saga over the past months foreshadowed that the Austrian group would not just throw in the towel and slip away, but grasp any and all means at its disposal to hammer through its HUF 32,000 conditional offer on MOL shares. We believe the legal battle could take long and drag out for years.
As a potential takeover of MOL has become so firmly entwined in the political scrubland - defending MOL is now a very popular slogan -, we believe a merger of the two companies simply cannot be carried out without a nod from Hungary's political elite. While OMV has launched an attack against lex MOL, which Parliament would be willing to amend - or “fine-tune" as outgoing Economic Minister János Kóka has recently said - if Brussels demands it, there can be no mistake about the ownership structure: MOL management control nearly 42% of the company."
Source: Portfolio Online Financial Journal
05.12.2007