The Moscow Times
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State utility Unified Energy Systems will offer $1.25 per share to shareholders who voted against the new reform plan that was adopted by the board of directors in March.

The offer price of the buyout was in line with the market price for UES shares at Thursday's close.

Analysts and insiders said few stakeholders would take the deal unless the stock fell well below current levels -- a scenario widely thought unlikely because of the company's strong reform-driven performance.

"If between now and then the market dies, there will be quite a few people who take the offer," UES board member David Herne said by telephone late Thursday. "If the market is strong, very few will take it."

Herne said that UES had already set aside a sum of money "that would be reasonable for the purpose of the buyout." They were required by law to name the offer price, he added.

Yelena Yushkova, utilities analyst at Finam brokerage, agreed that investors would be unlikely to take the deal.

"The reform benchmarks UES has been hitting recently have been very positive," she said. "We expect strength."

By next June, UES plans to sell of all of its assets to introduce competition into the electricity market and raise money for a sweeping $120 billion overhaul of the nation's power system.

The amended reform plan adopted last month inserted an interim phase of state control into the original plan. Instead of selling stakes in its generating companies, or gencos, directly to investors, it will transfer them to two state-controlled holding companies, one dominated by the hydroelectricity monopoly Hydro-OGK, and the other dominated by the Federal Grid Company. These firms would then be in charge of selling off the genco assets to the private sector over the following two to five years.