Oman Oil ups stake in Hungarian energy group

STAKE INCREASED: Oman Oil has increased its share in MOL to 15.4 percent. (Getty Images)

Oman Oil Co. (OOC) has upped its stake in Hungarian oil and gas group MOL to 15.4 percent from 8.4 percent, boosting the latter's defence against a possible hostile takeover.

"This is part of MOL's efforts to have an [ownership] structure which can ensure the independence of the company in the long term," said Peter Tordai, regional oil and gas sector analyst at KBC Securities in Budapest.

MOL said in a statement on the Budapest bourse's website on Friday that Oman Oil had increased its shareholding in MOL to 16,090,334 million shares from 8,774,040 million on Dec. 18.

MOL declined comment on the price. MOL shares closed at 10,545 forints per share on Dec. 18 which would value the deal at over 77 billion forints ($406.4 million).

MOL announced on March 10 that it would sell 8.77 million of its treasury shares to government-owned OOC in a move which analysts said was aimed to help MOL fight off a hostile takeover approach by Austrian oil group OMV and give it new access to upstream investment.

This transaction for OOC's initial 8.4 percent stake has still not been closed as Oman Oil was expected to pay for most of this stake with assets and this has not happened.

Prior to Friday's announcement, MOL shares surged on the Budapest bourse this week on market talk that an unnamed Middle East investor would acquire a stake of up to 7 percent in MOL via a bookbuilding process.

"So, an investor close to MOL boosted its stake to 15.4 percent in the company, with which the voting rights of those standing close to MOL increased," said Jozsef Miro, analyst at Erste Bank.

KBC Securities' Tordai said MOL was likely aiming for a stable partnership with Oman Oil in which it can rely on its votes in certain decisions, while Oman Oil may gain some say in strategic issues.

MOL boosted direct and indirect control over its own stock in the past one and a half years to over 40 percent, in response to the unsolicited takeover bid by OMV.

MOL protected itself through gaining control over its shares through options, treasury shares and allies, including Czech utility CEZ, which took an over 7 percent stake, and Hungarian bank OTP, where it parked around 8 percent.

OMV called off its bid for MOL in August, ending a year-long standoff between the two companies after the European Commission raised concerns that an OMV-MOL merger would reduce competition and could lead to higher prices, indicating that OMV might have to sell a refinery to get any deal approved.

OMV still holds about one-fifth of MOL although most of its shares are used in repo deals with banks to boost short term liquidity for OMV.

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