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Austrian OMV declares intent to combine with Hungary’s MOL - extended

OMV, the Austrian-based oil and gas company, on Tuesday declared its wish for a long-term cooperation with its Hungarian competitor MOL. CEZ says still seeking to buy up to 10% of MOL despite OMV approach. MOL rejected OMV’s approach.

While OMV was in a position to offer Ft 32,000 ($179.8) cash for every MOL share, technical impediments prevented the Austrians from achieving voting control, OMV said in an emailed press statement. OMV currently owns 20.2% of MOL, but MOL’s management effectively controls up to 40% of the share through a series of “structural arrangements,” the Austrians said.

Trying to overcome strong resistance on the part of Hungary, OMV stressed the combined business would be listed on both the Austrian and Hungarian bourses, and have a strong Hungarian presence on the board. OMV had attempted for some time to get control of MOL, but its fusion plans met with strong resistance on part of the MOL management and the Hungarian government. “The Board of OMV believes that the combination of OMV and MOL presents a unique strategic opportunity to create one of Europe’s leading integrated oil and gas companies, with a focus on the fast growing regions of Central and Eastern Europe,” OMV said. OMV asked to enter in a “constructive dialogue” with MOL stakeholders.

MOL was not immediately available for comment. News agency MTI reported that MOL shares have been suspended at its own request. The stock closed at Ft 26,970 on Monday.

Czech power utility CEZ says the renewed invitation by Austria’s OMV to Hungarian oil and gas group MOL’s management to embark on merger talks has no impact on its earlier decision to buy a stake in MOL of up to a 10%. “This has no influence on our intention to acquire up to 1% in MOL,” CEZ spokeswoman Eva Novakova said.

MOL was not immediately available for comment. News agency MTI reported that MOL shares have been suspended at its own request. The stock closed at Ft 26,970 on Monday.

Mol rejected OMV’s approach, saying in a statement that it “isn’t worth further consideration.” The bid “significantly undervalues Mol’s businesses and outlook” the company said.Mol shares advanced 1.8% to Ft 27,450 on Tuesday at 1:55 p.m. in Budapest. (m&c.com, Gazdasági Rádió)