WOOD Flash – CEZ: upside may be limited as press reports suggest company split may be more likely than a squeeze out
Yesterday (15 February), local media outlet Pravo announced that the Justice Ministry is reworking its recent proposal (Lex CEZ) that would have allowed the State to make a unilateral decision about splitting CEZ at the shareholder’s meeting. PM Fiala’s government is planning currently to take the power generation and mining private, while the downstream (distribution, supply, ESCO and other activities) would remain listed, with the minorities likely growing their stake in this new, smaller entity. The form of the transaction is not clear yet; however, based on the recent work on the law regarding the split, we believe that the probability of a squeeze out, followed by a new listing, preferred by the minorities, is falling gradually, as is the likelihood of a higher premium paid by the State for the assets.CEZ Group is a dynamic, integrated electricity conglomerate based in the Czech Republic and with operations in a number of countries of Central and Southeastern Europe and Turkey. Co. is an international group consisting of nearly 120 companies, Czech and foreign. Co.'s primary activities involve the production and transmission of electricity through nuclear, coal-fired and hydro power stations; production and distribution of heat and processing of secondary products generated during the production of electricity and heat as well as coal mining. Co. has operating companies in Poland, Bulgaria, Romania, the Netherlands, Ireland, Germany, Hungary, Albania, Turkey, Serbia, and Slovakia.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
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