'Croatian Authority Approves MOL's Bid For Peer INA' by Zsolt Balla

The transaction would make MOL the majority owner of INA, since the Hungarian company already holds 25%. MOL offered HRK2,800 ($844) per share for the package, while INA shares were traded at HRK2,772 in the early hours of Monday (Sep 1) at the Zagreb Stock Exchange. Following the financial authority’s approval, MOL has to make a public bid within a week, which will remain valid for 28 days after the publication.The 31% share stake of INA was offered for sale by the Croatian government earlier this summer. 

The fight for the holding (and thus, for control over the company itself in the case of MOL) was considered to be a new battlefield of the war between MOL and Austrian OMV, after the latter withdrew its public bid of Ft32,000 ($198) per share for MOL papers, (currently traded at Ft17,020 or $105) in August. 

The withdrawal followed an EU court ruling in favor of MOL, and was an explicit acknowledgement of OMV’s failure to gain a majority stake in the Hungarian company. OMV is also bidding for INA, aiming at becoming a regional leader on the energy market, but experts agree it has little or no chance to gain the upper hand in the struggle.

While the board management of MOL was said to be in continuous negotiations with the Croatian government over INA, the moment the Croats chose to offer their 31% stake early in August was anything but advantageous for MOL, Hungarian business weekly Figyelô reported last week. 

According to Figyelô, MOL was financially exhausted by the fight with OMV, and, although it managed to defeat its Austrian competitor, experts thought that INA was, at the moment, more than MOL could take on. 

Figyelô pointed out that MOL had used virtually all of its resources to buy up its own shares, protecting itself from OMV’s hostile take-over attempt.

Eagerly awaited

But MOL, on the other hand, couldn’t afford to let pass an opportunity it had been so eagerly waiting for. “MOL’s top priority is to maximize the growth possibilities in the region, providing eminent ROI for its shareholders,” the company said in a statement on Monday (Sep 1), while the company’s share prices hit one-year lows at the Budapest Stock Exchange (BÉT).
“MOL will continue to focus on international extension and the improvement of efficiency, maintaining the company’s risk factors. The increase of MOL’s share stake in INA is a key element of MOL’s strategy of international expansion,” the statement added.

MOL started its regional expansion in 2000, buying 36% of Slovakia’s Slovnaft. In recent years, the company bought 98.4% of Slovnaft, purchased Shell’s Romanian fuel stations, bought 75% of Austrian oil company Roth, 25% of Croatia’s INA, 67% of Bosnia’s Energo-petrol, 100% of Italy’s IES and Croatia’s Tifon companies, and 94.85% of its Hungarian competitor, TVK.

Zagreb-based INA is the market leader in Croatia, and plays a definitive role on the oil and gas markets of southeast Europe. The company’s market capitalization was $5.5bn in June, 2008. 

It also runs research projects in Angola, Egypt and Syria. Beside the two oil refineries, it has a 435-gas station network in Croatia, and a further 49 stations elsewhere in the region. MOL said that, in the case of a takeover, it would leave INA’s supervisory and management boards intact.

CEGE founded

MOL is teaming up with International associates to found Central European Geothermal Energy Production Ltd, the company announced last Saturday (Aug 30). The new company aims to develop and sell renewable energy sources, especially focusing on the exploration, production and sales of geothermal energy, and the construction of geothermal power plants and technologies for directly supplying thermal heat. 

The three founders, who have an equal one third share in CEGE include Iceland’s Enex hf. and Australia’s Green Rock Energy International Ltd.

The goal of the new company is to significantly contribute to Hungary’s plans for renewable energy sources and introduce technologies that have not yet been used in Hungary."

Source: Budapest Sun