A reduction of Austria’s stake in Oesterreichische Post AG (POST), which is being considered in negotiations to form a new government, may lift the company’s share price on increased liquidity, analysts said.
If the Alpine republic’s new government, subject to talks between the Social Democrats and the conservative People’s Party, cuts its stake to a voting minority of 25 percent from 53 percent, more investors may be willing to buy the stock because it will be easier to trade, according to analysts at Raiffeisen Centrobank and Kepler Cheuvreux.
“A number of people we approach are saying I cannot invest in this company because liquidity is too low,” Andre Mulder, an Amsterdam-based analyst at Kepler Cheuvreux, said in a telephone interview today. The fact that the government will have less control over the company may also spark investor interest, said Mulder, who rates the company at buy.
Austria’s Social Democrats may agree to sell stakes in state-owned companies as part of a plan to reform OeIAG, the holding that manages the country’s holdings in Telekom Austria AG (TKA), OMV AG (OMV) and Austrian Post, Der Standard newspaper reported today. The move is being pushed for by the conservatives, with whom the Socialists are in coalition talks.
At the current stock price, the government could raise about 660 million euros ($905 million) by cutting its stake in Post to 25 percent, according to Bloomberg News calculations.
In addition to Post, the state owns 32 percent of energy company OMV and 28 percent of telephone operator Telekom Austria.
Privatizations are a “pragmatic question,” Chancellor Werner Faymann said today, according to the Austrian Press Agency. While a sale of OMV shares may fall through because of an existing syndicate agreement with Abu Dhabi’s International Petroleum Investment Co, the government should become active where it makes sense, APA cited Faymann as saying.
Austria faces a budget shortfall of 24.2 billion euros until 2018, caused by new economic forecasts that are weaker than the ones used in previous budget plans. The country’s new government, which could be decided on as soon as this week, may also raise taxes on tobacco, sparkling wine and cars.
Still, the intention to cut stakes of state-owned companies probably won’t have a big effect on Austrian Post’s shares in the short term, said Bernd Maurer, a Vienna-based analyst at Raiffeisen Centrobank with a hold rating on the company.
“A legislative period lasts for 5 years, and no date has been given” for possible share sales, he said.
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