"The former Hungarian-Soviet Oil Company (Maszolaj) is being taken away from us. Once again, and now the Austrians are the villains - the Austrian government owns 31.5 per cent of OMV, which has been buying up Mol shares. It's no longer about war reparations, of course. This time they're paying - but we're not pleased.Actually - who, exactly, is not pleased? Shareholders seem to be happy, at any rate. They're more than willing to sell.
In June OMV raised its position in Mol from 10 per cent to 18.6 per cent, investing €1bn in the process. In a defensive move, Mol and a group of allied investors, including the state-owned MFB Invest, started buying large quantities of shares. Yes - the government sees the battle as its own, and the opposition is only too ready to agree. The prime minster said OMV's activities were "not a friendly move," and promised "to use all measures to stop" their buying spree. Neither the events themselves nor certain OMV statements have been too friendly - they suggest a hostile buy-out is in the works. But what does Hungary's government have to do with this?
If we type "hostile takeover" into a search engines, we will find no shortage of reports stating that a hostile takeover is hostile only towards a company's management. Normally, the reason for the attack is the company's lack of efficiency or the undervaluation of its shares. Management has an interest in beating back a hostile takeover, and they are also strongly motivated to spread the word that the matter is just important to employees, to customers and even to the country. But research has shown that none of this is ture.
Generally, for example, hostile takeovers tend not to lead to lay-offs. It's not just Hungarian governments that fall for this trick. There are plenty of west European examples. Spain's government recent defended the energy provider Endesa from Germany's E.On. Plenty of US states have erected extraordinary legal barriers against hostile takeovers.
If they are allowed to, then so are we, surely? We are, but why bother?
It's surprising that the government justified its intervention in such an abstract way. The Finance Minister told us that Mol was the Hungarian company with the highest earnings and the most foreign investors. My question: who cares, apart from those who wear a Hungarian rosette all year long and a couple of economic analysts? Would it not be more worthwhile discussing how an OMV acquisition might affect gas and petrol prices and supply?
It's likely that a combined company, with three major refineries, would be in a dominant position on the Hungarian, Austrian and Slovak markets. Both national competition authorities and the European Commission might want to ask whether the company should be made to sell one of those three refineries. Furthermore, there would be pressure to rationalise the distribution network - that is, close down petrol stations.
There's a more abstract approach, as well. Look at Mol's national high-pressure gas distribution network. Is it right for such a network to be in private hands? There's more debate about this now than back at the time of privatisation. There are arguments to be had, but it's also worth asking what private property actually is. I, for example, am the "owner" of a house in a village.
Yet I can't change its facade, and I'm obliged to cut the grass in the garden. The state has enormous regulatory power, and despite all the right- and left-wing populism we are treated to, the state has the same power when it comes to big multinational companies."
KÁROLY ATTILA SOÓS
The author is an economist.
Source:
HVG
24.07.2007