The large share offers conducted this year by the Romanian state, by Fondul Proprietatea and the EBRD were also welcomed by brokerage firms, whose activity had been weak in the past few years. Brokerages were put to work once again.
But more importantly, these transactions brought significant earnings for investors who took part in them, raising the appetite of foreign funds and of local investors for the Romanian bourse. For instance investors taking part in the Romgaz offering gained over 15% in a month (nominal earnings, calculated based on the value of shares bought, not on the overall investment) and investors who bought in the placements of OMV Petrom (SNP.RO) and Transgaz (TGN.RO) were in turn able to make significant gains because they bought the shares at a discount on the stock exchange price.
So, unless conditions on international markets change radically, 2014 could continue in a similar way, with major transactions from the state and from Fondul Proprietatea (FP.RO). This will also contribute to boosting the stock exchange’s daily liquidity. The increase in liquidity has particularly been seen in the last month, after the listing of Romgaz, when regular daily transactions climbed to over EUR10 million.
Here are the leading transactions conducted in 2013 on the Bucharest bourse:
- The initial public offer at Romgaz (RON1.734, of which RON1.129 billion on the Bucharest Stock Exchange)
The initial public offering to sell 15% in natural gas producer Romgaz Medias (SNG.RO) conducted in October is the largest ever transaction on the Bucharest bourse, although only 64% of the offer was conducted in Bucharest, while the rest of the shares were sold in London, through GDRs (Global Depositary Receipts based on Romgaz shares).
The seller was the Romanian state through the Economy Ministry (The Energy Department), which collected RON1.734 billion (EUR391 million), RON1.129 billion of which were from the Bucharest Bourse. The offer was brokered by a consortium made up of Goldman Sachs (US), Erste Bank (Austria), BCR and brokerage Raiffeisen Capital & Investment.
- Fondul Proprietatea buyback offer (RON600 million)
The public buy offer whereby Fondul Proprietatea bought back 600 million of its shares in November at the price of RON1 was the first transaction of this kind conducted on the Bucharest bourse so far.
Pressured by the main shareholders to reduce the discount between the price of FP stocks on the bourse and the value of the net asset per share, fund manager Franklin Templeton decided at the end of September to speed up the buyback program and buy 600 million shares in one go at more than the market price. All FP shareholders were able to sell some of their shares for RON1. This also raised the shares’ stock exchange price to over RON0.8.
The FP offer was 17.5 times oversubscribed, so each investor participating in the offer was able to sell 5.7% of its shares. Hedge fund Elliot, the largest FP shareholder, sold shares worth RON139 million.
- EBRD’s Petrom placement (RON386 million)
In November, a few days after completion of the Romgaz offer, the EBRD put up for sale an 0.8% stake in OMV Petrom (SNP.RO) through a private placement dedicated to investment funds and to individual clients with over EUR100,000. Demand for shares has been so significant that the EBRD decided to sell its full 1.61% stake in Petrom.
- The state’s Transgaz offer (RON315 million)
In April the state sold 15% in Transgaz Medias (TGN.RO) through a secondary public offering. Following the transaction, the state collected RON315 million (EUR72 million). The offer was brokered by Raiffeisen Capital & Investment, BT Securities and Wood.
The Transgaz offer was the first transaction of its kind where retail investors got a discount on the final price. While institutional investors paid RON178 per share, small investors who subscribed in the first few days of the offer got the shares at RON170 (a 5% discount).
- FP’s Transgaz private placement (RON304 million)
Fondul Proprietatea in turn took advantage of the good timing created by the Romgaz offer and in December sold its 15% stake in Transgaz for RON304 million (EUR68 million).
- Initial public offering of Nuclearelectrica (RON282 million)
The initial public offering of Nuclearelectrica (SNN.RO) conducted in September was the first really important test for the state’s privatizations program. Ultimately the company managed to sell the 10% stake at the minimum price approved by the government, of RON11.2
- FP’s Petrom private placement (RON247 million)
The sale of the 1.1% stake in OMV Petrom (SNP.RO) in May was the first major transaction conducted in 2013 by Fondul Proprietatea and it showed the focus of manager Franklin Templeton on what the shareholders wanted – the sale of assets in the portfolio and paying money to the shareholders.
(English version by Daniela Stoican)