PRAGUE/WARSAW (Reuters) - Poland’s biggest oil refiner PKN Orlen (PKN.WA) launched a voluntary tender offer to buy the remaining shares in its Czech downstream oil group Unipetrol UNPE.PR to take full control and delist it from the Prague bourse.
The Polish group said in a statement on Wednesday it was offering 380 crowns per share for Unipetrol, in which it holds 62.9 percent, a premium to Tuesday’s close and near record levels seen in the past month.
Unipetrol has been on an upswing in the past few years thanks to firming refining and petrochemical margins that have boosted profits to the strongest levels since PKN Orlen acquired the company in 2005, leading to the renewal of dividend payouts.
But PKN Orlen has had frosty relations with Unipetrol’s minority shareholders who have challenged decisions and sought bigger dividends because the company is debt-free.
“The current ownership structure prevents PKN Orlen from reaping the full benefits of the initiatives we have put in motion in the Czech Republic, including our efforts to improve the refining and sales efficiency and our investments in the petrochemical assets,” PKN Orlen Chief Executive Wojciech Jasinski said in the statement.
“Also, minority shareholders have expressed different expectations regarding the dividend policy,” he said.
The offer valued the firm at 68.9 billion crowns ($3.16 billion). Shares jumped 3.6 percent to 378 crowns in early trade on Wednesday. They traded at a record 389 crowns in November.
Unipetrol posted earnings before interest, tax, depreciation and amortization (EBITDA) of 11.9 billion crowns in 2016, a bumper year, and is near completing an 8.5 billion crown investment into a new polyethylene unit (PE3) that analysts see boosting core profit by 1 billion crowns a year.
But shareholders also challenged Unipetrol’s decision last year to buy Czech chemicals firm Spolana from PKN Orlen because of worries over the cost of needed investments.
Paulinino Limited, Unipetrol’s biggest minority shareholder with 20 percent, said it was too early to comment on PKN Orlen’s offer. “We need to analyze all the details of the offer thoroughly,” its representative, Pavel Muchna, said by email.
Analysts at Komercni Banka said the price was too low given the earnings outlook.
PKN Orlen said the deal, running until Jan. 30, was conditional on acquiring at least 90 percent. To secure that amount will cost PKN Orlen 3.05 billion and up to 4.2 billion zlotys ($1.17 billion) for full control.
It said the deal would not affect its other acquisition plans and dividend. It added it would finance it with its own funds and a syndicated loan available to the company.
PKN Orlen’s cash reserve stood at 6.5 billion zlotys at the end of the third quarter.
Reporting by Jason Hovet and Agnieszka Barteczko; Editing by Muralikumar Anantharaman and Edmund Blair