CEZ Gains on Reported $1 Billion Offer for Plants: Prague Mover
CEZ AS (CEZ) rose after Mlada Fronta Dnes cited billionaire Pavel Tykac as saying he was ready to pay more for the biggest Czech utility’s Pocerady and Chvaletice coal- fired power stations than other bidders.
CEZ increased 0.4 percent to 733 koruna by the end of trading in Prague, after earlier rising as much as 0.9 percent. The stock has advanced 1.4 percent since the end of last week.
The assets are worth as much as 20 billion koruna ($977 million), including 5 billion koruna of carbon credits allocated to the two plants, Tykac, co-owner of Czech Coal AS, said in an interview published by the newspaper today. CEZ said three weeks ago that Czech Coal and Energeticky a Prumyslovy Holding AS, a rival utility, have expressed interest in buying the assets.
“We will make CEZ a very good offer,” Tykac said in the interview. “I can’t imagine anyone else will trump it.”
State-run CEZ said on May 31 it may sell the two stations to resolve a legal dispute with Czech Coal about the price of lignite supplies. Czech Coal, which owns the Vrsany mine located 5 kilometers (3 miles) from the Pocerady plant, seeks to buy and modernize the two plants to extend their life and ensure long- term demand for its lignite, Tykac said.
“If he is willing to pay up for the assets, we believe that this is positive news for CEZ’s shares in the near term,” Bram Buring, an analyst at Wood & Co. brokerage in Prague, wrote in a report to clients today. CEZ could use the proceeds of the sale to expand its renewable generation capacity and fund a planned construction of atomic reactors, Buring said.
“These are only Mr Tykac’s estimates, which CEZ will not comment on at this point,” Barbora Pulpanova, a spokeswoman for CEZ, said when reached by telephone.
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