Polish coal giant JSW reportedly set to make another bid for Bogdanka

By bne IntelliNews November 19, 2012

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Confusion reigns over whether Polish state-controlled coal miner JSW is preparing another move for peer Bogdanka following local media reports that it has hired advisors ahead of an attempted takeover.

Citing unnamed sources, Dziennik Gazeta Prawna reported on November 16 that JSW has retained White & Case and Credit Suisse to consult as part of a plan to buy the Lublin-based Bogdanka. A JSW spokesperson refused to confirm or deny the story, while a senior government official said any plan for state-controlled JSW to take over privately-owned Bogdanka makes no sense.

"JSW is still considering several acquisition projects to expand its coal reserves," is all JSW spokeswoman Katarzyna Jablonska-Bajer would tell PAP news agency. However, CEO Jaroslaw Zagorowski denied any interest, saying his company is preparing for the crisis, not looking to spend capital and take on its peer, reports Warsaw Voice.

According to Erste analysts, Bogdanka management has said it "knows nothing" about a potential takeover, but added it will consider any option beneficial for the company and its shareholders.

Meanwhile, Deputy Economy Minister Tomasz Tomczykiewicz told reporters that the ministry sees "absolutely no sense" in such an acquisition. "I see no sense in a state Treasury company taking over a private company," he said.

However, Erste points out that there is also speculation doing the rounds that JSW is preparing a €1bn bond issue, "which approximately equals Bogdanka's size."

"JSW has previously targeted Bogdanka for acquisition, trying to outbid [Czech peer New World Resources'] offer in early 2011, but neither proceeded with the purchase at that time," point out analysts at VTB Capital.

"Given that Bogdanka is predominantly a thermal coal producer, acquiring it would mean JSWs further integration into the thermal coal business (with the environment rather weak in the short term)," VTB continues. "This news could have come on the back of the governments idea to consolidate the Polish coal industry, which apparently, if it happened, would take place under JSW. We therefore expect further newsflow."

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