Mesna Industrija Braća Pivac acting in concert with KRAŠ-ESOP (the company’s second largest shareholder) announced the intent to publish a takeover bid.

Kraš published a document on the Zagreb Stock Exchange stating that their largest shareholder Mesna Industrija Braća Pivac acting in concert with KRAŠ-ESOP (the company’s second largest shareholder) announced the intent to publish a takeover bid.

The mentioned intent for a takeover bid arose as a result of passing the company 25% ownership threshold in accordance to the Company Takeover Act.

Mesna Industrija Braća Pivac has started negotiations with KRAŠ-ESOP regarding the joint action, which should be decided in the following 15 days. In case if the two parties do not reach a joint decision, Mesna Industrija Braća Pivac will publish independently a voluntary takeover bid.

Note that currently two entities together own 49.18% shares of Kraš, of which Mesna Industrija Braća Pivac owns 30.73%.    

The mentioned intent for a takeover bid seems to have transferred to an increase in the share price and turnover as well. As of yesterday, the share price closed at HRK 500 per share, which is an increase of 29.5% compared to the beginning of the month. Meanwhile turnover in the past 3 trading days surged and amounted to HRK 6.6m, which represents 46% of this year’s turnover.    

Yesterday, the CEO of Austria’s OMV, Rainer Seele, stated that global oil demand will grow at the slowest pace in many years in 2019 because of a softer world economy, predicting that sluggish energy markets will spur mergers and acquisitions in the industry.

He further states that there are signals from the consuming markets that the industry should prepare for slower GDP growth. And hence it will translate into tougher days. In the recent weeks, brent oil prices have been trading at around $60 per barrel, down from their 2019 peaks of $75 per barrel, as slower economic growth outweighed lower oil supplies from sanctions-hit Iran and Venezuela. Currently brent oil trades at $62.8 per barrel.

Brent Oil Price (USD/barrel) (2016 – 9.9.2019)

Source: Bloomberg, InterCapital Research

Seele also stated that expects growth in global oil demand to fall below 1 million barrels per day this year – for the first time in many years, which he predicts will continue in 2020. Seele further sthates that the industry might need to prepare for consolidation. The M&A market might return to a more healthy mode as assets become more reasonably priced