August 28, 2018 / 1:50 PM / 25 days ago

UPDATE 1-PKN Orlen gains control of Unipetrol, shareholders fight buyout price

* General meeting approves squeeze-out at CZK 380/share

* PKN Orlen holds 94 percent after earlier voluntary buyout

* Plans de-listing of Unipetrol from Prague exchange

* Expects to become sole owner end-September or early-October (Updates after EGM approval, with PKN comment)

PRAGUE, Aug 28 (Reuters) - Poland’s largest refiner PKN Orlen secured full control of its Czech unit Unipetrol on Tuesday, ending years of minority shareholder disputes and removing one of Prague’s biggest stocks from the exchange.

Unipetrol shareholders, as expected, approved the forced buyout - or so-called squeeze-out - of the company’s remaining minority shareholders by PKN Orlen, which owns 94 percent, but not without a fight over the offer price.

The imminent departure of Unipetrol is a blow for the Prague Stock Exchange, which will lose its sixth biggest stock and see the number of main market listings fall to eleven.

The squeeze-out follows a voluntary buyback completed in February in which PKN Orlen offered Unipetrol shareholders 380 crowns a share, paying 21.4 billion crowns ($953 million)to raise its stake from 63 percent.

The squeeze-out price has been set at the same amount, angering hold-out shareholders who now plan legal action.

“They will squeeze us out and we will sue them,” shareholder Tomas Hajek, who leads a group representing 300 minority shareholders, said before the general meeting.

Analysts see little chance for shareholders to achieve a higher price.

PKN Orlen, which bought into Unipetrol in 2005, said it expected to become the company’s sole owner around the end of September or in early October. It defended the squeeze-out offer price and called the process transparent.

PKN Orlen’s initial voluntary buyout offer came after Unipetrol shares soared to record highs late last year, lifted by strong margins, dividend hopes and prospects of rising profit once the company brings a new polyethylene unit online early next year.

Czech-Slovak financial group J&T, for many years Unipetrol’s second biggest shareholder with a stake of more than 20 percent, sold out in the initial offer. It had long been the lead dissenting voice to PKN-appointed management.

PKN Orlen has also fought with other minority shareholders who have sought more frequent dividend payments.

Unipetrol lost money in the years after the global financial crisis but a strong market has since helped profits to hit record levels. It paid dividends out of 2015 and 2016 profits - only the second and third times since PKN became majority shareholder.

Petrus Advisers, currently Unipetrol’s largest minority shareholder, in a letter to PKN Orlen before Tuesday’s meeting that was seen by Reuters, called the decision not to pay a dividend from 2017 profit “another perfect example of PKN Orlen’s aggression when dealing with... minority shareholders.”

The letter also said the Polish group had been using cash generated by Unipetrol for its own purposes.

PKN Orlen said Unipetrol participated in the group’s cash pooling system and any transactions were of a market nature.

($1 = 22.4520 Czech crowns)

Reporting by Jason Hovet and Robert Muller in PRAGUE and Anna Koper in WARSAW; Editing by Mark Potter and Kirsten Donovan

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