As expected, the Slovak Finance Minister, Pavol Rusko, recommended Enel as the SE tender winner on Friday to the Cabinet for final approval. The Cabinet should make the final decision on October 6 (Wednesday). Rusko said that Enel would be able to find sufficient financial resources to complete the investment project. Rusko also added that Enel would be the only company with a majority of shares held by private investors (at the time of signing the contract). Source: Bloomberg. We believe that CEZ's chances of winning the tender are virtually nil. Note that Enel offered a EUR 840m bid, CEZ came second with a bid of EUR 690m, while Inter RAO came third. While we must point out that the bids are very complex and only limited information is available to the public, we see CEZ's bids as too aggressive and therefore assess its failure to win the tender as positive for the stock.
Separately, CEZ will submit final bids for both Romanian power distributors (Electrica Moldova and Electrica Oltenia) by October 6. According to Vladimir Schmalz, head of acquisitions at CEZ, the company is also interested in the acquisition of Romanian power production plants and is ready to spend up to EUR 1 bn. Source: Bloomberg.
Tomáš Gatěk, Patria Finance