CEZ's buyback

A key argument against yesterday's cabinet decision to raise Kč 31bn by floating 7% of ČEZ was the fear that the state could become victim of an IPB-like wild privatization. Ministers Miroslav Kalousek and Martin Říman assured the public that although the state's stake will fall from 67.7% to below 61%, no hostile takeover is possible. This won't satisfy the critics, though. ČEZ has Kč 140bn that could be used for dividends, yet the state decided to rush into a stock sale instead. There's bound to be something fishy here, critics will say. Much attention has been paid to the cabinet decision, but equally important is ČEZ's general assembly in April. Shareholders could limit their approval to buying back the 7% stake, or they could approve an extended buyback program. At least theoretically, ČEZ has the cash to regain over time the supermajority being squandered by the state. [Czech Republic electricity energy Finance Industry AGM annual general meeting Prague Stock Exchange market PSE flotation]