Gazprom plans to make an offer to TGC-1 (RTS: TGKA) minority shareholders in order to obtain control over the genco, reports Interfax. This was the sudden news for the market, since it was earlier expected that Gazprom would distribute TGC-1 share packages among two legal entities in order to avoid presentation of the obligatory offer. As a result, TGC-1 share valuations rose by 7% on March 31.
In October 2007, Russian Energy Projects (REP) acquired TGC-1’s 17.7% additional issue on behalf of Gazprom. In the meantime, Gazprom BoD approved the acquisition of 100% of REP’s shares. After that Gazprom received the Federal Antimonopoly Service’s permission to acquire 50% plus one share of TGC-1. In February 2008, Gazprom was in agreement with UES to acquire the state’s share package of 28.7% of the genco shares. As a result, Gazprom group plans to get 46.4% in TGC-1.
The market is well aware of the news about the coming presentation of an offer to TGC-1 minority shareholders by Gazprom at RUB 0.035, or USD 0.00149 per share. In our opinion, the deal for REP’s package consolidation by Gazprom may be structured in such a way that TGC-1 minority shareholders would receive the offer at a price below RUB 0.035, USD 0.00149. We do not recommend buying TGC-1 shares with expectations of the forthcoming offer.
Our recommendation for TGC-1 shares is Sell, with a target price of USD 0.00115 per share.
0.553
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