Romanian electricity distribution holding Electrica and local investment fund Fondul Proprietatea haven’t reached an agreement on the minority stake that the fund holds in Electrica’s subsidiaries.

The two companies decided to end the negotiations as they didn’t agree on the transaction price, according to announcements made on the Bucharest Stock Exchange.

Electrica has been negotiating in the past months the acquisition of Fondul Proprietatea’s minority stakes in electricity distribution companies Electrica Distributie Muntenia Nord, Electrica Distributie Transilvania Sud and Electrica Distributie Transilvania Nord and in electricity supply company Electrica Furnizare.

Fondul Proprietatea holds stakes of about 22% in each of these companies, which are valued at EUR 173 million in its portfolio. Electrica, which is 49% controlled by the state, was looking to pay a price closer to EUR 100 million, according to sources familiar with the negotiations.

Electrica had EUR 475 million in cash and equivalents at the end of 2014, most of the money coming from the EUR 444 million initial public offering the company conducted in June 2014.

The holding made a consolidated net profit of EUR 91 million, almost 60% higher than in 2013.

Electrica’s shares, which are trading on the Bucharest Stock Exchange with the ticker EL, lost more than 4% on Friday, trading at RON 11.85 (at 11:22), after the company announced it ended the negotiations with Fondul Proprietatea. The company’s capitalization went down to EUR 940 million.

Fondul Proprietatea’s shares (BVB ticker: FP) didn’t react to the news, trading at RON 0.855. The fund’s market cap was EUR 2.34 billion.

Romanian fund, close to a deal with state-owned holding on electricity distribution assets

Andrei Chirileasa, andrei@romania-insider.com