Last summer, financial and insurance group Eurohold Bulgaria, acquired 67% equity interest in local companies CEZ Distribution and CEZ Electro in a package with other assets of the Czech energy company in Bulgaria through its energy subsidiary Eastern European Electric Company (EEEC).
Following a tender offer for the outstanding shares, the majority owner increased its stakes in CEZ Distribution Bulgaria and CEZ Electro Bulgaria to 99% and 97%, respectively. The transactions with a total value of 103 million levs (53 million euro) were carried out on the stock exchange in Sofia in March. Eurohold has announced it plans to take action to delist the shares of both companies from the public register and the Bulgarian Stock Exchange.
The more significant deals were concluded at 300 levs per share of CEZ Distribution, which is above the price in the tender offer made in the autumn of last year- 291 levs. The price per share of CEZ Electro Bulgaria was 28 thousand levs, compared to a price of 26.9 thousand levs in the offer. Apparently, the sellers of the packages were several pension funds, which did not accept the offer at the time, as well as other smaller shareholders.The deals were financed with funds from a package secured by an increase in Eurohold's equity and a loan.
In the future, even if none of the remaining minority shareholders sells their shares, Eurohold Bulgaria will be able to delist both companies from the stock exchange without problems, as it owns over 95% of their equity.
With their delisting, the era of power distribution companies on the local equity market will come to an end. They were brought up for public trading 10 years ago, when the Bulgarian state sold out the remaining 33% stakes it held in the three local energy companies majority owned by CEZ, Czech power utility group Energo Pro and Austria's EVN, respectively. The Bulgarian subsidiaries of the latter two were delisted soon afterwards, with the largest chunks of the minority stakes bought out mainly by the majority owners. With the delisting of the two former CEZ companies, capitalization of over 700 million levs will be deleted from the Bulgarian Stock Exchange - 140 million levs from CEZ Electro and 586 million levs from CEZ Distribution. The two companies reported revenues of over 400 million levs and 970 million levs for .YEAR?, respectively.
Eurohold comes in
Less than a year ago, Eurohold Bulgaria acquired seven local subsidiaries of CEZ Group for a total of 335 million euro. Thus, the holding became owner of 67% of the largest power grid operator in Bulgaria - CEZ Distribution, and power supplier - CEZ Electro, as well as 100% of the largest electricity trader CEZ Trade.
The package also included a company for ICT services, a solar park, biomass energy production company, as well as the company that coordinated the activities of all divisions of CEZ Group in Bulgaria.
Subsequently, takeover offers were made for the purchase of the shares of the minority shareholders in the two public companies. Initially, the offers were blocked by the Financial Supervision Commission, but later on the offers were improved by the new majority owner and approved by the regulator. The offers were increased by a total sum of some 5.3 million euro to a total of 117.36 million euro for the remaining 33% interest in the two companies.
CEZ Distribution and CEZ Electro said last month they received their sharehoders' approval to rebrand the companies under the Electrohold brand, to Electrodistribution Grid West and Electrohold Sales, respectively, as of end-April.