Démász board backs EdFI takeover offer

In Hungary

The board of electricity distributor Démász Nyrt on Monday unanimously voted in support of a takeover bid by Electricite de France International (EdFI) for all of the company's shares, Démász announced.

The board said the offer of Ft 20,000 per share was reasonable and proposes that shareholders should accept the bid. The board noted that Démász would retain the monopoly in its service area for the long term, but it would also be subject to centrally regulated prices and stagnating profits. However, the risks and opportunities of electricity trade on the regulated and deregulated markets counterbalance each other. Ernst and Young assessed the offer price and found it fair from a financial aspect, the statement said.
EdFI's bid is also backed by Démász's unions. EdFI intends to keep the company's employment policy unchanged if the public bid is successful.
On August 28, EdFI announced it would make a public offer for all outstanding shares of the company at a price of Ft 20,000 per share. Its offer for the shares is 25% more than the 180-day turnover-weighted average price of the shares, which is the minimum offer required by stock exchange rules.
In addition to Démász's ordinary shares, EdFI has offered to buy the one voting preference share held by the State Privatization and Holding (ÁPV) Rt. EdFI also requested approval of the purchase from the Hungarian Energy Office (MEH), as required because EdFI aims to acquire more than 75% of Démász. Approval is expected within 90 days.
If EdFI acquires more than 90% of Démász shares in the buyout offer, it will exercise its right to squeeze out the remaining shareholders. EdFI is organizing the buyout offer through Deutsche Bank AG and CIB Bank Zrt.


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