Russia's Acron still chasing Polish chemical set

By bne IntelliNews October 29, 2013

bne -

Russian fertilizer producer Acron is looking to have another stab at increasing its stake in Polish chemicals holding Grupa Azoty, despite Warsaw having fought off efforts by Russian suitors to enter the sector last year.

Acron wants to increase its stake in Grupa Azoty to just over 20% from the current 15.3%, should the share price fall to an attractive level, the company's chairman, Alexander Popov, told reporters in Moscow on October 28, reports Reuters.

Poland announced in early 2012 that it intended to sell off all state holdings in the chemicals sector. However, it turned that on its head in the summer when Acron emerged as the leading suitor for the country's largest chemicals company, Azoty Tarnow. Warsaw also suspected that a bid from Polish rubber maker Synthos for Pulawy was a front for eventual Russian interest.

On the one hand, the resistance to Russian interests in the sector stems from Poland's historical experiences behind the iron curtain. On a more practical level, as the country's largest consumer of gas, the sector is seen as a vital support in the government drive to reduce the country's dependence on Russian energy.

Circling the wagons, the Polish government promptly merged the pair to create a new state champion, Grupa Azoty. However, that was not before Acron managed to buy up enough shares on the open market to give it around 7% in the eventual holding. The Russian company has since been steadily increasing its stake in what is Europe's third largest nitrogen fertiliser producer. Making an offer of a strategic alliance, Acron announced in April that it had managed to raise that stake to 12.9%.

It has clearly been busy expanding that stake in the meantime, but apparently hopes to deflate the pressure that campaign has put on the share price. Azoty's Warsaw-listed shares are currently trading at a five-month high.

"At the moment Azoty is expensive, so it's probably not worth buying at this price, but if the price falls then we'll definitely increase our stake and our goal is a bit over 20%," Popov said. "This would enable us to appoint a representative to the supervisory board and access company documents," he noted. He declined to name a price at which Acron would resume its buying.

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