Unipetrol's largest minority shareholder to sell stake to PKN Orlen
PRAGUE (Reuters) — Czech downstream oil group Unipetrol's largest minority shareholder Paulinino Limited will sell its stake to majority owner PKN Orlen when it opens a voluntary tender offer next week, Paulinino said on Wednesday.
Polish group PKN Orlen, with 63% in Unipetrol, last week announced plans to try to buy up all remaining shares and de-list the Czech refiner as it seeks to reap benefits from its investments and upgrades.
The buyout, set at a price of 380 crowns per share, would also end a period of uneasy relations with minority shareholders, led by 20% owner Paulinino, part of the Czech-Slovak investment group J&T, which has questioned PKN Orlen's strategy and sought higher dividends.
The shares traded at 376.20 crowns on Wednesday.
Unipetrol has been making progress in the past few years thanks to rising refining and petrochemical margins that have boosted profits to the highest levels since PKN Orlen acquired the company in 2005.
Paulinino, in its decision to sell, said it expected the high performance in the sector would be hard to maintain, evidenced in margins starting to fall.
"Such favorable macro conditions, as the sector enjoyed between 2015 and 2017, will be very difficult to maintain over the long term together with low oil prices," Paulinino representative Pavel Muchna said in a statement.
"We have decided to accept the offer and we will sell our shares in Unipetrol to the Offeror (PKN Orlen) under the proposed terms."
Paulinino said it would use proceeds to consider other investments, using its experience in the petrochemical and energy sectors.
The offer values Unipetrol at 68.9 B crowns ($3.2 B). It will run from Dec. 28 to Jan. 30.
While Paulinio's sale alone will not get PKN Orlen to its conditional target of 90%—the legal threshold allowing a forced buyout of remaining shares—it is likely to prompt other shareholders to follow suit.
Some analysts, though, have said the offer looked low given Unipetrol's outlook once it opens a new polyethylene unit, an investment worth 8.5 B crowns.
Unipetrol reported earnings before interest, tax, depreciation and amortization (EBITDA) of 11.9 B crowns in 2016, a bumper year. Analysts have said the new unit could boost core profit by 1 B crowns a year.
Reporting by Jason Hovet; editing by Jason Neely and Keith Weir
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