MOL wins exclusivity in PKN Orlen share purchase talks

The outgoing cabinet yesterday granted Hungarian oil and gas group MOL exclusivity in negotiations for the purchase of a 17.58% stake in oil giant PKN Orlen. If the deal is clinched, the budget would get an extra zl. 2 billion, though the State Treasury's stake in PKN Orlen would be reduced to 10%. "We've given MOL exclusivity in negotiations and, if it fulfills certain conditions, the transaction will take place," Treasury Minister Aldona Kamela-Sowinska said on Tuesday. Under the contract provisions, PKN Orlen would purchase an equivalent stake in MOL, thus becoming the first company in Poland to have a stake in a foreign country's largest company. The deal would create the largest oil group in the region, able to withstand hostile takeovers and growing competition from global oil giants. The other bidder for PKN Orlen was Austrian OMV, whose offer is said to be less satisfactory than MOL's. According to the Treasury, OMV's chemical subsidiary Borealis, would create too much competition in the Polish chemical sector and could result in the transfer of PKN Orlen shares to the Amsterdam or Dublin bourses, thus weakening the Polish capital market. (Gazeta Wyborcza, p.17, Reuters) J.K.