Assertive comments last week by Polish oil company PKN Orlen SA concerning its planned merger with Hungary's MOL Rt left market observers puzzled

"In the past few weeks, the communications of PKN and MOL were very different. PKN is continuously hinting at a merger, while MOL's management declines to comment," said Toomas Reisenbuk, head of investment at Trigon Central and Eastern European Fund. "There are no signs of the picture becoming any clearer. MOL's management currently enjoys full confidence from our investors, but long-lasting uncertainty would not be healthy." MOL accounts for 7% of the portfolio of the EUR15 million Tallinn-based fund, launched last April. A similar view came from an equity analyst who requested anonymity. "There must be some concrete events in the background. Nobody would make up such comments without reason. But no details have been revealed," the analyst said. PKN Chief Executive Zbigniew Wrobel told a press conference in Warsaw last Friday that PKN will appoint an advisor by Dec. 10 for its planned link-up with MOL. Wrobel said a letter of intent on a merger could be signed when Hungarian Prime Minister Peter Medgyessy visits Warsaw Nov. 20. MOL's management remained tight-lipped. "If a company wants to maintain or increase competitiveness, it must expand," MOL CEO Gyorgy Mosonyi said at a press conference last Friday. However, he declined to offer any specifics about potential acquisitions, such as those of the Czech company Unipetrol, Romania's Petrom or PKN. In recent years, MOL acquired 70% of Slovakia's Slovnaft a.s. and 25% of Croatia's Industria Nafte d.d. (INA). Asked about Medgyessy's talks in Warsaw, and Polish reports of a possible merger, Mosonyi said the premier's visit is a routine affair. Observers are divided about the likelihood of a MOL-PKN merger. "MOL and PKN are of similar size, controlling complementary markets. If PKN wants to join forces with a Central European firm, it should be MOL," the equity analyst said.