Since mid-September, quotations for Moscow Heat Distribution Company (MTK) shares have unfairly been on the way down, given the looming buyout offer from Moscow Integrated Energy Co. (MOEK), and the discount to the potential buyout offer has widened to 42%. In our view, the likelihood that a buyout offer will be made before the year-end is high. Therefore, we recommend buying MTK shares with the goal of making a profit. The shares could then be presented under a buyout offer or sold on the free market, given that the spread between the current market price of the shares and their buyout price will narrow considerably after the release of the official information that the buyout offer has been made.
Kruglov Denis
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Sector:
Power Utilities
Company:
Moscow Heat Distribution Company
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