Austria’s state-owned energy firm OMV on Tuesday said that it would continue to push for a merger with its Hungarian peer MOL despite a bill passed by Hungary’s parliament to protect strategic energy companies from foreign takeovers.
“We still intend to reach a combination with MOL,” OMV spokesman Thomas Huemer told Deutsche Presse Agentur dpa. ‘We believe consultation will happen and are not under any time pressure.’ The Hungarian parliament displayed unusual unity in accepting the bill on Monday, with opposition and government lawmakers delivering 334 votes for and only four against. The law allows strategic companies to take steps to defend against hostile takeovers after a public bid and forces a bid to be approved by the company’s highest body. It also forces potential buyers of defined strategic companies to submit a business plan - approved by the buyer’s shareholders - to Hungary’s financial market regulator PSZAF before making an offer.
OMV’s attempt to launch a hostile takeover of MOL sparked the drive for the new legislation. The new law is an impediment to a takeover, but the European Commission has expressed concern over the law. Huemer said he was confident that Internal Market Commissioner Charlie McCreevy would review the law thoroughly. McCreevy last Thursday wrote to Hungarian Economy Minister János Kóka warning that he would push through a case against Hungary in the European Court of Justice if the law were passed and found to be protectionist. “If the actions or legislation currently envisaged by your authorities were to put an impediment on economic factors from other member states taking an interest in MOL, then I would be compelled to recommend that the commission continues the existing proceedings to their conclusion in the court,” McCreevy wrote. The existing case was filed in December after the government did not change laws deemed discriminatory against foreign investors.Both János Kóka and Prime Minister Ferenc Gyurcsány have said the law was drawn up in compliance with European Union regulations. Neither McCreevy nor his spokesman could immediately be reached for comment, but it is believed that the commissioner has yet to see the text of the law.
OMV has for months been pushing MOL to sit down at the negotiating table and last week offered Ft 32,000 Hungarian ($179.5) per share, thus valuing the company at around $ 20 billion. MOL’s board rejected the bid, saying it undervalued the company’s assets and prospects. The Austrian firm says it has identified annual synergies of €400 million ($546 million), but MOL says a merger would force the combined entity to divest significant assets in the region. Huemer, however, said this was simply not the case. “We think it would be possible to simply sell some filling stations or allow other entities partial use of our refineries,” he said. Several of MOL’s independent shareholders have come out in favor of talks with OMV after pressure from the Austrians, but so far the MOL board has refused to budge. (Gazdasági Rádió, m&c.com)