REPUBLIKA.CO.ID, JAKARTA -- State-Owned Enterprises Minister Dahlan Iskan believes that the share price of PT PGN in the capital market will not decline if it is acquired by the state oil and gas company, PT Pertamina.

"I think the price of its shares will adversely increase if the state-owned gas distributor firm, PT PGN, is acquired by PT Pertamina," the minister stated here on Friday.

He explained that in general, capital market players shared different opinions from those of the public.

"Capital markets have price fluctuation characteristics. Prices are always rising and falling. But, capital market players always feel that the share prices will continue to increase if the company has good fundamentals," the minister added.

Therefore, Dahlan noted that he did not believe that the price of PT PGN's shares will fall.

"The corporate action will not reduce the value and volume of the shares owned by the shareholders of both the companies," he remarked.

The Ministry of State-Owned Enterprises (SOE) has assigned PT Bahana Securities and PT Danareksa Securitas to evaluate the merger plan of the gas business of PT Pertamina and PT Perusahaan Gas Negara (PGN).

There are two schemes in the acquisition of PT PGN by PT Pertamina. The first scheme has two stages. In the first stage, PT PGN will buy PT Pertagas, which is a subsidiary of PT Pertamina, and in the second stage PT Pertamina will purchase PT PGN.

The second option is that PT Pertamina directly purchases PT PGN in a single stage.

According to Dahlan, the government has agreed to PT Pertamina's suggestion to acquire PT PGN and asked it to conduct a study on its corporate action plan. The government's agreement was stated in a document, the copy of which was made available to Antara on Sunday.

The document contained the results of a meeting held between State-owned Enterprises Minister Dahlan Iskan and the Board of Directors and Commissioners of PT Pertamina.

In the meeting, which was held last Tuesday, State-Enterprises Deputy Minister Dwiyanti Tjahjaningsih, PT Pertamina President Director Karen Agustiawan, and Chief Commissioner of Pertamina Sugiharto were also present.

Sugiharto emphasized that the acquisition of the state-owned gas distribution firm PGN will not spark protests among the minority shareholders or the public, as the acquisition will ensure the company's survival.

He remarked that Pertagas, a subsidiary of PT Pertamina, controlled the gas distribution, so it would not trigger any protests.

In the meantime, M. Yasin, a member of PT Pertamina's board of commissioners, stated that the acquisition process will take at least eight months, including 3.5 months for its execution.

In its scenario, PT Pertamina is planning to merge PT Pertagas and PT PGN, and as a result of the merger PT PGN will become a subsidiary of PT Pertamina.

PT Pertamina believes that the merger will be the best step forward for the future of the two companies.

After the merger, PT Pertamina will hold 30-38 percent of the shares, the government will get 36-40 percent, and the public will hold 26-30 percent of the shares.

If the government authorizes PT Pertamina to hold its share portion, then PT Pertamina will be the majority shareholder, with a stake of 70-74 percent. In this case, the government will continue to remain in control of the company through a shareholder agreement.

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