Bulgartabac tobacco holding successfully completed two auctions on the local stock exchange yesterday selling out a total of 80.6% of the printing and paper packaging plant Jurii Gagarin for a total of BGN 32.4mn (EUR 16.6mn). The main package of 67% was sold to a single buyer at the price of BGN 27mn while the other shares went to a large number of minority shareholders to expand the free float. Only one bidder participated in the auction for the main package despite initial statements of strong interests. Nevertheless, the price offer exceeds the auction threshold by 22.5%. It is close to the latest stock quotes for the company and roughly 50% above the price level reached before the release of the auction plan.

The name of the new majority shareholder will be announced upon the formal completion of the share transfer by the end of this week. The bid was tendered through the local Financial Brokerage House. Press rumours suggest that the intermediary acted on the request of the local First Investment Bank or the Slovak strategic investor Grafobal. The latter version looks more likely in our view, as banks rarely invest in non-core businesses.