Swiss capital just reported:
* Local media mentions FP RO may sell its entire 19% stake in OMV Petrom (SNP RO) in the next few days according to uncited sources, local news website economica.net wrote today.
* FP’s stake in SNP RO is currently valued at EUR 1.1bln (USD 1.4bln), that would be largest deal to date on the Bucharest SE.
* SNP stake represents 35% of FP’s NAV.
Fit Investment Ideas comment:
I do not doubt that if this is correct than it is a result of Paul Singer´s Elliot Associates activst preassure on Templeton.
At the moment Fondul has 8% of NAV in cash. If this rumor is right the cash would go to 43% of NAV. This would mean significant buyback acceleration. Personally I believe such large transaction is unlikely. Selling “only” half of the OMV Petrom stake would leave Fondul with 25% of its NAV in cash. At current NAV discount it would allow Fondul to buy back close to 35% of outstanding shares at current prices. If correct I would expect significant rerating in the FP.
Yesterday Elliot Associates announced, that it has increased their stake by 26 mn shares in FP. It is a first purchase in many months. It might be an indication that something may be happening.