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Hungary acquires controlling stake in Rába

December 14, 2011

Hungary's National Development Ministry and National Asset Management Agency (MNV) jointly announced that the the state has acquired controlling interest in the exchange-listed Hungarian automotive company Rába after a public tender.

Hungary cannot become economically independent without increasing state ownership in strategic industries, State Secretary János Fónagy of the Development Ministry argued, confirming that the public tender offer for the free float of automotive group Rába was successfully concluded in mid-December. For the state, the objective was to gain controlling interest in Rába, seen as a strategically important company, and that goal has been attained.

Based on responses to the tender offer, the state may acquire a 73.84% stake of Rába equity, once the Competition Office approves the transaction. A HUF 13.4 billion fund previosly earmarked for this purpose should be sufficient to pay for the deal; the excess amount will be released and funneled back into the budget.

With non-voting treasury shares taken into consideration, state control over votes is expected to rise to 76.97%. Institutional investors tendered 26% of Rába equity whilst small shareholders tendered 21%. Approximately 1,000 small shareholders took the opportunity to offer Rába stock for sale to the government.

No decision has been made as to whether the state will seek to further increase its stake in the company, or whether the stock will be de-listed at the Budapest Stock Exchange.

As the deal requires competition authority approval in three countries (Hungary, Germany and Austria), MNV has submitted a request for permission to the European Union. In a pessimistic scenario, the approval procedure may take 2 to 4 months to complete. The national asset manager will pay for the shares within 5 days of competition approval.



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