Daily analyst comments

On June 9, Rosneft made a $189 mln offer to acquire Yukos assets in southern Russia. Initially, Promregionholding was declared the winner in this auction, Interfax reported quoting Oil Information Agency. Yukos interim receiver is supposed to accept the offer within 10 days after the application was filed.

According to our estimates, the market price of assets in the lot amounts to $290 mln. The market value of Yukos stake in Kubanenergo alone is $164 mln. Thus, Rosneft has acquired extremely appealing utilities assets in a promising region at a very attractive price (at a 40% discount to the market value).

We do not believe that Rosneft is purchasing these assets for sale, since utilities assets account for 90% of the lot and against the background of stronger interest of strategic investors in the utilities industry, Rosneft may well have its sights set on becoming a new player on the electric power market.

The stake in Kubanskaya Generating Company is to be swapped for TGC-8 shares which corresponds to a 7.5% interest. Rosneft will maintain other assets in the lot as portfolio investments which were acquired 30-40% below market price and offer fairly good upside potential.