Hernadi: MOL open to partnerships, but not with OMV

The Hungarian energy group MOL is open to partnerships with larger rivals, but not with the Austrian OMV, said the company’s CEO Zsoltan Hernadi in an interview with a prestigious financial newspaper.

"If I were to look for a partner, it could be Shell, BP, or Gazprom, but definitely not OMV," Hernadi said in an interview with the Financial Times Deutschland. "However, for now, we do not necessarily need a partner," he added. The Austrian OMV is very interested in MOL, which dismisses such an option: "We have, on our part, put a stop to that story with OMV," Hernadi said.

OMV, which is partially state-owned, stated that it is interested in a merger that would be acceptable to both sides, and the company’s CEO Wolfgang Ruttensdorfer ruled out any possibility of a hostile takeover. Last week, OMV increased its stake in MOL to 18.9 percent, and Ruttensdorfer emphasized that he retains the right to further purchase shares of that company. However, Hernadi is convinced that OMV is ready to seize any opportunity for a hostile takeover. But, as MOL limits voting rights for shareholders to 10 percent, that company is protected from potential hostile takeover attempts. Additionally, according to Hernadi, MOL’s option to buy back its shares also serves as protection. MOL owns eight percent of its shares, while another 10 percent is owned by Hungarian banks OTP and MFB, which allows that company to prevent takeovers at the general assembly. However, Hernadi further pointed out that it has not yet been agreed how the banks should react in such a situation.

The next general assembly of that company is scheduled for April 2008. According to him, MOL’s resistance to OMV is largely related to the shareholding structure of that Austrian company. "The Hungarian government and our supervisory board do not want another government to have influence over MOL." MOL was fully privatized in 2006. With annual revenues of 11.8 billion euros, it is the largest independent company in Central Europe. Hernadi also emphasizes that it is unlikely that regulatory bodies would approve a merger with OMV unless MOL sells at least one of its refineries and several hundred gas stations. Outside Central Europe, he said, an attractive partner is Russia. "We are currently negotiating with several Russian companies about cooperation with refineries and in the gas business." The partnership between Gazprom and MOL is potentially attractive for that Russian state monopoly, as it would allow the Russians to expand their supply chain, he said. Besides Russia, MOL is considering acquisitions in Croatia and Serbia. (Hina)