OREANDA-NEWS. March 15, 2010. RAO Energy System of East is in negotiations with Finnish-based concern Fortum over the acquisition of its shareholding in Saint Petersburg Supply Company (RTS: PBSB) for RUB 1 billion. The transaction is likely to be completed in two or three months. Fortum owns 31.02% of PBSB total charter capital, including 29.98% of common shares. RAO Energy System of East is a majority holder in St. Petersburg Supply Company: it owns 49% of the company’s charter capital, including 57.4% of common shares.

In view of the announced terms, Fortum is to sell off its share package at a 30% discount to the market. This could provoke a negative response from investors, especially given that this share package exceeds the blocking stake. Additionally, since directly after the selloff, RAO ES of East’s share in PBSB will exceed 75%, it will be obliged to make a buyout offer to the minority shareholders, the terms of which does not promise to be lucrative. At the same time, rumors that RusHydro seeks to acquire share packages in energy retail companies currently held by RAO ES of East are likely to spur investors’ interest in PBSB: there is much stronger likelihood that the company will pay out dividends in the run-up to the deal. Above all, with the coming of RusHydro, Saint Petersburg Supply Company should get a strong strategic investor, which will also have to make an offer to PBSB minority shareholders, this time on more favorable terms.