Poland to Prevent Russian Takeover of Azoty Tarnow

By CnAgri2012-07-16 17:10:52 Print

Polish fertiziler producer Azoty Tarnow over the weekend approved a share issue and launched a bid for a Polish peer, moves supported by the Polish government and designed to fend off a hostile takeover bid from a Russian company.

The developments reduce the chances of success of a tender offer by Russian fertilizer maker Acron for the Polish company, whose formal name is Zaklady Azotowe w Tarnowie-Moscicach SA. The Russian company last week sweetened its bid for Azoty Tarnow, offering nearly a 50% premium over the Polish company's six-month average share price.

Poland's treasury is reluctant to allow companies from Russia--Warsaw's communist-era overlord--to invest in the country. Acron is seeking to buy up to 66% in Azoty Tarnow in an offer than ends Monday.

To fend off the Russian bid, shareholders in Azoty Tarnow on Saturday allowed the company to issue up to 240 million zlotys ($70 million) worth of new shares, which the company will offer in exchange for shares in Polish peer Zaklady Azotowe Pulawy SA. Azoty Tarnow said Friday it was seeking to buy 32% of ZA Pulawy, in a step toward creating Europe's second-larger producer of fertilizers. Azoty Tarnow offered to pay PLN110 a share, 6% above Friday's closing price, valuing the whole company at 2.10 billion zlotys ($612 million).

The Polish government holds a 32% stake in Azoty Tarnow and a 51% stake in ZA Pulawy.

Poland's treasury minister, Mikolaj Budzanowski, called the Russian bid for Azoty Tarnow a hostile takeover attempt and supported the Polish company's share issue and takeover plan.

"We're gaining a chance to create the Polish and European leader in the chemical sector, which due to the scale and diversification of operations, and the expected synergies, will be able to generate better operating results and rates of return for shareholders," said Mr. Budzanowski in a statement.