THE ROMPETROL TENDER OFFER AWAITING A NEW PRICE CNVM misses out on EUR 1 million in fees from the "Rompetrol" deal

ŞTEFANIA CIOCÎRLAN (Tradus de Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 17 februarie 2010

Even though it did its best to help minority shareholders get a higher price in the tender offer for "Rompetrol Rafinare" (RRC), the Romanian Securities Commission (CNVM) was left out in the cold by some of the minority shareholders it did its best to protect, as they chose to deal with the Kazakhs directly, in 25 deals with a negotiated price. As a result, the CNVM lost over one million Euros in fees, money which it could have made if the 3.3 billion shares of RRC which were transferred yesterday would have been acquired as part of the tender offer on the Regular section of the market.

The National Securities Commission takes 2% off the value of a tender offer and 0.08% off trades performed on the regular section of the stock exchange. Therefore, the Commission would have made around 4.9 million lei (EUR 1.2 million), if the 3.3 billion shares of RRC which were transferred on Monday through Deals, would have been subscribed as part of the tender offer through the Regular section of the market, at a price of 0.0741 lei/share. Since those shares were traded on the Deal section of the exchange, the Commission will only make 198,000 lei in fees (close to EUR 50,000).

Losing out these fees deals a heavy blow to the budget of the National Securities Commission, especially at a time when it is strapped for cash. So much so in fact, that it recently proposed the five SIFs to pay their fees for the first semester of 2010 in advance.

On Monday, the Rompetrol Group bought 1.37 billion RRC shares at 0.075 lei/share, through brokerage firm Eastern Securities, controlled by senator Verestoy Attila, who is also a shareholder of RRC. The price was superior to that of the tender offer (0.0741 lei).

Besides getting a better price for his shares, the senator also earned more from commissions, since fees for transactions conducted on the Deal market are higher than on those on the Regular market. Brokers say that the Rompetrol Group may have paid a fee of up to 0.3% of the value of the trades conducted through Eastern Securities, (745,436 lei or EUR 181,813 respectively). The officials of the brokerage firm declined to disclose the fee for the deal involving the 1.37 billion RRC shares sold through "Eastern Securities".

Also yesterday, the Rompetrol Group acquired an additional 1.93 billion RRC shares, through BRD Groupe Societe Generale, which also intermediates the public takeover offer.

The only seller that reported the sale of Rompetrol stock was SIF5 "Oltenia", which sold 0.46% of RRC, in exchange for 7.33 million lei.

The tender offer, suspended after just one day

The watchdog of the capital market decided on Monday to suspend the trading of RRC shares, as the National Securities Commission wants to raise the price of the tender offer to have it match the price at which the Deals were conducted (t 0.075 lei/share).

Article 54 of the Regulation no. 1/2006 of the Romanian Securities Commission states that, if the acquirer or other entities acting in concert with it, buy stock in the company which is the object of the tender offer, in transactions outside the tender offer, the acquirer is required to raise the price of the tender offer to match the highest price paid as part of the special transactions.

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