ČEZ minority shareholder buyout? A bad idea, say Stanjura and Pilný

Bringing energy company ČEZ under full state ownership and subsequently squeezing out its minority shareholders is not a good idea. Former finance minister Zbyněk Stanjura (ODS) and former ANO finance minister Ivan Pilný agreed on this in the discussion programme Poledne s Moravcem. In their view, the state's current stake in ČEZ allows it to take all important steps. The state holds around 70 percent of ČEZ shares, with minority shareholders owning the rest.

Bringing the company under full state ownership is one of the stated aims of the current government, which justifies it by the need to give the company greater freedom to invest. Prime Minister Andrej Babiš (ANO) said in recent months that the cabinet wants to complete the process of taking full control of ČEZ no later than the end of the current electoral term in 2029.

"I have not heard an answer to the fundamental question of what tasks the state can fulfil with 100 percent of ČEZ shares that it could not carry out with the current 70 percent. I have not heard what would then be better for managing ČEZ, for citizens, customers or companies," Stanjura said.

In his view, questions arise over who will pay for it. The options are combinations of state budget funding, new ČEZ debt or the sale of part of its assets. Another question is what impact it would then have on the company's rating and its future financing, he added..

"My view is similar, because I do not know the answer to the question of why ČEZ is being sold," Pilný added.

According to him, the state has such a majority in ČEZ that it can do practically anything within the company. Those who buy on the stock exchange the part of the company engaged in energy distribution will profit from bringing ČEZ under full state ownership. "Minority shareholders are looking forward to receiving a hefty premium (in a squeeze-out). These groups will certainly profit from it," he noted. In Pilný's view, bringing ČEZ under full state ownership will definitely have no impact on electricity prices. "That is complete nonsense," he remarked.

In April, ČEZ management proposed the creation of a subsidiary into which it wants to carve out from the current structure, for example, companies ČEZ Prodej, ČEZ Distribuce, GasNet, ČEZ ESCO, trading companies and telecommunications company Telco Pro Services. The company will retain at least a 51 percent stake in the new subsidiary, later offering the remaining part to investors. The proposal was approved by the company's general meeting in June.

The entire process of carving out part of ČEZ into the new subsidiary is proceeding according to schedule, according to ČEZ chief financial officer Martin Novák. "We are still targeting the end of the first quarter of 2027, and we are sticking to this schedule," he said last week. Some of the companies will therefore be transferred to ČEZ Energy by the end of this year, he said.

ČEZ management has not yet decided on the method for the subsequent sale of a minority stake in the new company. According to Novák, it is still working with two basic scenarios: selling the stake through an initial public offering, meaning an offering of shares on the stock exchange, or a direct sale to large funds. According to some analysts, the value of the stake ČEZ wants to offer investors could amount to CZK 150 billion, or possibly more. This should subsequently make it easier for the company to buy out the existing minority shareholders in the parent company as a whole.