Final Word from Thursday, July 2, 2009

J&T and ČEZ were so eager to buy the Czech assets of International Power that they paid a 45% premium to ensure that rival Czech Coal wouldn't even be allowed to submit a bid. They played hardball by threatening not to bid at all if their preemptive offer of ₤738m wasn't accepted. There was much more at stake than just a few energy assets. ČEZ was buying a vertical energy monopoly and is now well on its way to completing nine of the 12 steps outlined last month in the Final Word. Forcing Czech Coal to sell its mines will be the crowning achievement. Few foreign investors who understand the implications of this chain of events will dare to invest into the Czech energy market. Creation of a domestic coal and electric monopoly wouldn't need to be a bad thing. But it would require that the "national champion" work in the interest of the nation, and this isn't one of the steps in ČEZ's plan.[Czech Republic Opatovice Energotrans Pražská teplárenská PPF EP Holding]

Glossary of difficult words

to play hardball - to use uncompromising and ruthless methods;

preemptive - relating to the purchase of goods or shares by one person or party before the opportunity is offered to others (the tender for International Power's assets was canceled);

crowning - relating to the triumphant culmination of an effort or endeavor, esp. a prolonged one);

national champion - a company in a key industry that is shown preferential treatment because of its significance to the country.


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