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Rafako Surges Most on Record as PBG Bets on Polish Energy in Takeover Deal

Rafako SA (RFK) jumped the most on record after PBG SA (PBG) offered a 65 percent premium for a majority stake in Poland’s largest industrial boilermaker as the builder seeks to “increase its chances” of winning construction projects.

Rafako gained as much as 32 percent to 12.37 zloty by 10:20 a.m. in Warsaw today, rising the most since it started trading in July 1994. PBG fell to the lowest in almost three weeks, declining as much as 3.4 percent to 143.6 zloty. The benchmark WIG20 Index decreased 0.5 percent.

Wysogotowo, western Poland-based PBG signed a preliminary deal to buy 50 percent plus one share in Rafako from Elektrim SA for 540.8 million zloty ($194 million), or 15.54 zloty a share. Poland’s third-largest construction company, which is bidding to build at least 6 power plants in the country, needs Rafako to “increase its chances” to get the contracts.

Power utilities in the country, which depends on coal for about 90 percent of its electricity, need to invest more than 200 billion zloty in power generation through 2025 to comply with European Union requirements, the government estimates.

PBG will announce a public bid to reach 66 percent in Rafako as it needs to comply with the Polish law, Chief Financial Officer Przemyslaw Szkudlarczyk told TVN CNBC television today.

Buying Rafako may increase PBG’s chances to win power tenders as both companies take part in rival groups that bid to build Polish plants, including PGE SA’s project in Opole and Enea SA’s facility in Kozienice.

To increase the focus on the energy sector PBG plans to sell its road-building and civil engineering units to Spain’s Obracon Huarte Lain SA; it recently completed the takeover of power engineering company Energomontaz Poludnie SA. (EPD)

To contact the reporters on this story: Maciej Martewicz in Warsaw at; Pawel Kozlowski in Warsaw at

To contact the editor responsible for this story: James M. Gomez at

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