WOOD Flash – CEZ: splitting business would generate CZK 65bn additional value
Yesterday’s presentation by CEZ’s CEO Benes was an unambiguous statement that management is promoting the “transformation†scenario to the government as its best option for financing new nuclear. The upshot for minority investors is potentially owning a larger (c.49%) stake in the “clean†business, with a higher valuation than the current 8x EV/EBITDA, while being bought out of the “dirty†traditional generation and mining business (unlike the German examples, there is no option to retain a stake in both). Speculation that the government will accept CEZ’s proposal, and what terms will be offered to the minority investors, is likely to support the stock in the mid-term, despite falling coal and power prices (-4% and -7% ytd, respectively).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.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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