Synthos bids for Pulawy as interest in Polish chemicals rises

By bne IntelliNews June 19, 2012

Tim Gosling in Prague -

Polish rubber manufacturer Synthos made a bid worth PLN1.96bn (€458m) for state-controlled chemicals company Pulawy on June 18. The offer appears to rule the bidder out from making a counter-bid to Russia's Acron for another state-controlled fertilizer producer, Azoty Tarnow, as has been speculated upon in the press.

Broker PKO, which is overseeing the sale of Pulawy, said Synthos is ready to pay PLN102.5 per share in the first 12 days of the bid starting on July 9 - after which the offer drops to PLN98.77, reports Reuters. Pulawy shares edged up 0.3% to PLN102.60 in early morning trading on the back of the news. Although the bid offers a premium of just PLN0.2 to Friday's closing price, analysts told the newswire that it could be attractive for the Treasury Ministry due to anticipation of lowering grain prices and slowing Chinese growth - the stock's main drivers.

Pulawy has gained 27% this year, much of it in recent days on speculation that an offer was in the works. That expectation was driven by Acron's bid in late May for Azoty Tarnow. Warsaw is resisting the offer, as much due to political opposition to selling major assets to Russia as the pricing of the offer at a discount to the company's market price.

The Treasury has rejected Acron's offer and claimed that it does not "rule out" a counter offer. Polish media reported on June 15, without citing sources, that Synthos could bid for the company. However, Parkiet admitted that was a long shot, and the move for Pulawy may back up that doubt. The paper also speculated that Germany's PCC could team up with private equity funds to make an offer, but CEO Waldemar Preussner said reports of his company's interest are premature.

Despite the resumed crisis in the Eurozone and a series of failed privatizations in 2011 due to low investor interest, Warsaw said in April that it is sticking to a target of €15bn in revenue from the sale of state assets in 2012/13, with all of its stakes in the chemicals sector up for grabs. The Treasury Ministry confirmed that the 32% stake in Pulawy is amongst those slated for privatisation and said it would examine Synthos' bid. "Because (Pulawy) is listed, the sale of shares by the Treasury Ministry can also take place by answering a tender," it said in a statement.

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