RIGA - Prospects looked grim for the outcome of the mandatory repurchasing of minority shareholders' stakes in Latvijas Gaze, the national gas company, with a major stakeholder saying it would hold out for a better deal.
Holders of the controlling stake – Germany's Ruhrgas (28.28 percent), E.ON. Energie AG (18.79 percent) and Latvia's Economy Ministry – have made the compulsory offering at 5.5 lats (8.4 euros) per share, but Itera Latvija, which owns 25 percent of the company, said it would not accept the offer, according to reports.
Itera Latvija President Juris Savickis said the price was too low, and that they had paid $20 per share when it bought its stake at an auction.
Russia's Gazprom, which also has a 25 percent stake, has also failed to respond to the offer, which will be open for a month.
In accordance with Latvian law, shareholders who directly or indirectly come into control of over 50 percent of a company's stock must offer to buy out holdings of minority shareholders at the fair market price.
Janis Ogsts, chief broker at Hansabanka, said that the large shareholders certainly would not be able to fully buy out the holdings of the small shareholders. He predicted that the stock price would remain between 5.5 lats - 5.7 lats during the buyout offer, citing a strong interest in Latvijas Gaze stock on the market.
Financial analyst Sandiis Martinovs of Parex Asset Management said that small shareholders, who together hold slightly over 3 percent of Latvijas Gaze, would hold onto their stake in the company. Martinovs said that the company was one of the few in Latvia pursuing successful operations and paying dividends. He also added that the company's stock price might decline to levels near 5.5 lats but would increase gradually after the completion of the buyout.