Gazprom Rises After Winning Moscow Utility With $3 Billion Bid

OAO Gazprom (OGZD), the biggest natural-gas producer, rose to a three-week high in Moscow trading after submitting the winning bid for a local heating company.

The shares climbed as much as 2.5 percent to 132.20 rubles, the highest intraday price since July 22, and were at 132.11 rubles as of 5:09 p.m. local time.

The company’s Gazprom Energoholding unit won an auction to buy the Moscow government’s stake in Moscow Integrated Power Co. (MOEK), or MOEK, for 98.6 billion rubles ($3 billion), the Moscow Property Department said on its website. That was the minimum bid allowed, according to the department, which said the only other qualified bidder, a unit of OAO Sberbank, pulled out.

Gazprom, whose Mosenergo power unit is Moscow’s biggest electricity producer, is now a step closer to controlling the city’s heating market too. By acquiring the local government’s 89.9 percent stake in MOEK, which distributes heat and hot water to the capital and its suburbs, Gazprom can make more heat and power together, boosting efficiency of production and supply.

“Gazprom Energoholding took the financing upon itself, removing risks from Mosenergo, while Mosenergo is the main beneficiary,” Sergey Beiden, an analyst at Otkritie Capital in Moscow, said today by telephone. Mosenergo’s share of the city’s heating market will increase in the next three years, while MOEK may turn off its most inefficient boilers, he said.

Mosenergo rose as much as 2.2 percent, before trading up 1.9 percent at 1.1898 rubles.

State-run Gazprom, based in Moscow, has amassed 17 percent of Russia’s total power generating capacity at more than 80 electricity plants.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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