Financial Times: Mol ready to welcome allies to help fuel growth

By Christian Holler and Matthias Ruch
Published: August 20 2007 03:00 | Last updated: August 20 2007 03:00

Mol, the Hungarian energy group, is open to partnerships with bigger rivals, chief executive Zsolt Hernádi said.

“If I had to look for a partner, I would ask Shell, BP or Gazprom, but not OMV,” he told FT Deutschland, the Financial Times’ sister paper, in an interview. “But at the moment we don’t necessarily need a partner,” he added.

Mol is being courted by Austrian rival OMV, but has fiercely rejected the approach. In the interview, Mr Hernádi again stressed that position: “From our side, we have ended this whole OMV theatre. We have other things to do. We are not actors.”

OMV, which is partly state-owned, has said it was looking for a merger agreeable to both sides. Wolfgang Ruttensdorfer, OMV’s chief executive, has ruled out a hostile takeover.

Last week, OMV said its holding in Mol had risen to 18.9 per cent, with Mr Ruttensdorfer stressing he would reserve the right to continue buying shares.

But Mr Hernádi said OMV would seize any opportunity for a hostile takeover. But because Mol restricts voting rights for shareholders to 10 per cent, it is protected against takeover attempts, he added. “Our share buyback is also functioning as a protection.”

Mol holds 8 per cent of its own shares, while Hungarian banks OTP and MFB own 10 per cent each, enabling the company and the banks to potentially prevent a takeover at a general meeting.

There were, however, “no agreements on how the banks would have to act in such a situation”, Mr Hernádi said. Mol’s next general meeting is scheduled for April 2008.

Mol’s resistance to OMV was due largely to the Austrian company’s shareholder structure, Mr Hernádi said. “The Hungarian government and our supervisory board do not want another government to have influence on Mol.” Mol was fully privatised in 2006 and with an annual turnover of €11.8bn ($15.9bn), is Central Europe’s biggest independent company.

Mr Hernádi said he doubted the competition authorities would approve a merger with OMV unless Mol sold at least one of its refineries, as well as hundreds of petrol stations.

Outside Central Europe, Mr Hernádi said Russiawas attractive. “We are currently talking to several Russian companies about co-operation with refineries and in the gas business.”

A partnership between Gazprom and Mol could be attractive for the Russian state-controlled monopoly, Mr Hernádi said, because “the Russians could extend their supply chain”. Besides Russia, Mol is looking at acquisitions in Croatia and Serbia.

Copyright The Financial Times Limited 2007

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