PKN’s Unipetrol Drops on Speculation of Private Equity Offer

Updated on

Unipetrol AS declined after a newspaper reported about a bid for the Czech refiner that analysts said would be too low for PKN Orlen SA to sell its majority stake.

Czech energy company Energeticky a Prumyslovy Holding AS teamed up with billionaire Petr Kellner’s PPF private equity group to bid for Unipetrol, valuing the entire company at about 30 billion koruna ($1.2 billion), Hospodarske Noviny newspaper reported on Tuesday, citing several unidentified people. Spokesmen for PPF, PKN Orlen and EPH all declined to comment on the report.

“I think such a deal is very unlikely,” Lukasz Prokopiuk, a Warsaw-based analyst at broker Dom Maklerski IDM SA, said by phone. “Unipetrol is a strategic asset for Orlen. It could well be worth twice what they’re offering.”

Unipetrol’s valuation implied by the reported bid is below the current market value of 32.5 billion koruna. The stock fell as much as 2.3 percent to the lowest in one week and was trading 1.2 percent down at 179 koruna as of 12:39 p.m. in Prague. Unipetrol shares rose 7.3 percent last week and have gained 37 percent this year.

The Czech refiner reported a record second-quarter profit of 3.3 billion koruna last week as plummeting crude oil prices helped widen the refining margin and recovering Czech economy boosted consumption. The management said it is possibly open to paying a dividend next year.

“This is definitely not the right time to sell when you have such high refining margins,” ING Bank analyst Andrzej Kubacki said by phone. “We’re seeing the best macroeconomic environment in years.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE