Uchenna Izundu
International Editor
LONDON, Dec. 5 -- Austria's OMV AG has launched legal proceedings in the Hungarian courts to remove the barriers to acquiring MOL Rt., upping pressure on the company's management to accept its $20.6 billion bid.
OMV has asked for the state-imposed 10% voting limitation to be revoked and has called on the European Commission to say that MOL has violated the principle of free movement of capital within the European Union. OMV also views as an obstacle MOL's ability to remove a limited number of board members at a time.
OMV Chief Executive Wolfgang Ruttenstorfer has urged MOL's board to consider a formal offer—or face an extraordinary general meeting. "The financial benefits of the offer we would be prepared to make and the strategic rationale have received a strong reception from both OMV shareholders and the shareholders of MOL," he said. "We are again requesting that MOL's board exercise their fiduciary duties by removing the impediments, allowing OMV to present a formal offer which can be decided upon by the shareholders. Failing that, we are prepared to initiate an EGM."
OMV has repeated its desire to acquire MOL despite its rejection of the offer on the grounds that it is "value-destructive." OMV's offer this time is dependent on the caps on voting rights being removed, and the cancellation of the 40% of the shares controlled by MOL's management. Legal proceedings have not changed its attitude to the takeover attempt, MOL said, because there is no "business rationale in a combination with OMV."
Any shares bought using MOL's resources should happen in a transparent and open manner, OMV urged, stressing that no economic rights should be attached to treasury and quasi treasury shares.
Last month, the EC asked the Hungarian government in a formal notice to explain "lex Mol," the new law where takeovers of companies in "strategic" areas can be blocked using a new set of defences.
If Hungary fails to show that is acting within the remit of EU law, the EC will launch enforcement proceedings.
Contact Uchenna Izundu at [email protected].
