Listed holding companies Opus Global and Konzum, owned by PM Viktor Orban's friend Lorinc Meszaros, reached an agreement with shareholders of BSE-listed 4iG to acquire just over 50% of the IT companyʼs shares on June 6. The deal needs regulatory approval.
Trading in the shares of both Opus Global and 4iG were suspended just ahead of the opening bell on the Budapest Stock Exchange on Wednesday pending the extraordinary announcement.
The legal predecessor of 4iG was established in 1990 for the development of open standard and open source technologies for the domestic market. In the past 10 years, 4iG has been engaged in application development, ERP systems rollout, IT infrastructure and IT operation, business intelligence and bank IT.
The buyers were two private equity funds of Konzum with 12.94% and 23.16% of the shares, respectively, while Opus Global bought a 14.15% stake. The new owners have to make a mandatory public offer in 15 days for all remaining shares in the company as their stake exceed 33% of the voting rights.
The offer price must equal the weighted average price for the past 180 days, which is HUF2910 (€9.1). The shares of 4iG have surged recently, which suggests that some had insider knowledge of the deal.
As in a previous case, when companies owned by Meszaros acquired BSE-listed CIG Pannonia, in days prior to the announcement, the share price of the insurance company skyrocketed. The Magyar Nemzeti Bank, which is also the stock market regulator has not launched an inquiry into these clear cases of abuse of insider information.
BSE-listed small caps such as Konzum, Opus, and Appeninn have been referred to in the Hungarian media as the "Meszaros shares", named after the mayor of Felcsut, who has gained stakes in them. Konzum shares rose 60 fold last year and Konzum by 14 fold.
Meszaros, ranked as the second-richest businessmen in Hungary has seen his business empire expand though winning public procurements since 2015 when Viktor Orban broke ranks with oligarch Lajos Simicska, the former Fidesz financier.
Many see Meszaros as the proxy to the Prime Minister. His business empire which includes a vast network of companies across sectors, from tourism to banking, industry, agriculture, retail, media, and energy.
Opus Global also said it has started talks with 4iG on the transfer of its 24.67% stake in Takarekinfo, which provides Hungaryʼs integrated savings cooperatives with IT and telecom support, with the aim of capitalizing on the two firmsʼ synergies.
4iG incurred HUF281mn in losses last year as it turned a HUF98mn operating profit in 2016 to a HUF225mn loss. The company booked HUF17.3bn revenue last year. Opus reported a consolidated after-tax profit of HUF5.9bn in 2017, after a loss of HUF0.7bn in 2016.