'No bid expected' for Poland's Ciech from Czech billionaire

12 July 2012 16:37  [Source: ICIS news]

LONDON (ICIS)--Poland's treasury ministry is now not expecting a bid for chemical group Ciech from Czech billionaire Zdenek Bakala after negotiations failed to progress to both sides' satisfaction, a ministry source said on Thursday.

Bakala and ministry officials were unable to agree an appropriate price for the ministry's controlling 38.7% stake in Ciech, Europe's second-largest soda ash producer, the source added.

The source said he could not offer comment on a report in Polish daily Parkiet that Bakala was also unhappy about the amount of information presented to him regarding Ciech's financial situation.

After digesting the unlikelihood of Bakala making a bid, analyst Piotr Drozd at Prague-based investment bank Wood & Company wrote in a note to investors: “Mr Bakala's interest in Ciech was widely discussed.

"Although the market remained somewhat sceptical about the transaction, the possibility of a bid being right around the corner sparked some interest in Ciech (with the shares up 10% since mid-June vs a 1% uptick in the WIG index [Warsaw Stock Exchange Index]). Therefore, we could perceive this news as negative.”

The treasury ministry hopes privatisations may enable the Polish state to dispose of its remaining major assets in the chemical sector before the end of 2013.

Bakala is the controlling shareholder in FTSE 250-listed central European coal miner New World Resources (NWR).

The Ciech group includes loss-making toluene di-isocyanate (TDI), epichlorohydrin (ECH) and epoxy resins unit Zachem.

Ciech has said it will listen to offers for Zachem and may close the subsidiary if an acceptable bid is not received.

By: Will Conroy
+44 20 8652 3214

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