Large "Rompetrol" stake changes hands in a series of special transactions

• Almost half of the outstanding shares changed hands yesterday on the "Deal" market at a price higher than the one in the tender offer

The first day of the tender offer for the 5.06 billion shares of "Rompetrol Rafinare" (RRC), initiated by the Rompetrol Group, ended with a surprise deal, by which 3.3 billion shares changed hands yesterday, through a total number of 25 special deals worth 248 million lei (around EUR 60 million).

Yesterday"s deals were conducted at a price of 0.0750 lei/share, higher than the price of the tender offer of 0.0741 lei/share. Brokers believe that the buyer in those deals was KazMunayGaz, the majority shareholder of RRC.

"According to Regulation no. 1 of the Romanian Securities Commission, the acquirer can buy stock on the Deal market, during an ongoing tender offer, if the price is higher than the one in the tender offer", says Marcel Murgoci, head of trading at brokerage firm "Estinvest". The benefit of Deal transactions is the fact that the company which acquires the shares no longer has to pay to the CNVM the fees for running the tender offer, Mr. Murgoci said.

The price of the tender offer for "Rompetrol Rafinare" sparked a conflict between the Rompetrol Group controlled by state-owned gas giant KazMunayGaz and the Romanian Securities Commission (CNVM). The CNVM only greenlit the tender offer after the Rompetrol Group agreed to the Commission"s demands and raised the initial bid of the tender offer (0.0625 lei), accepting to pay around EUR 90 million to acquire the outstanding five billion Rompetrol shares.

Daniel Gavrilă, broker with "Egnatia Securities", says that looking at yesterday"s deals one needs to consider the fees that the Rompetrol Group would have been required to pay to the Romanian Securities Commission. "The fees on the Deal market are higher than on the Regular market, so any buyer opting for the Deal market needs to be extremely motivated", he said. He added: "I don"t see the logic of someone buying on the Deal market and then subscribing shares in the tender offer on the Regular section at a loss. One needs to take into account the size of the fees that KazMunayGaz would have had to pay to the CNVM if it were to buy all the outstanding shares on the Regular section of the market".

SIF "Oltenia" (SIF5) yesterday reported that it sold its 0.46% stake in Rompetrol Rafinare (RRC), for which it earned 7.33 million lei.

The deal by which KazMunayGaz bought 1.37 billion shares in RRC was intermediated by brokerage firm "Eastern Securities", controlled by Verestoy Attila.