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Deadline for Non-Binding Bids for Mercator Extended

Zagreb, 29 September (STA) - The 5 October deadline for non-binding bids for a majority stake in Slovenia's leading retailer Mercator has been extended until 17 October, the Croatian business daily Poslovni dnevnik reported on Thursday.

According to unofficial source quoted in the report, bids for a 50.3% stake in Mercator, being sold together by beverage group Pivovarna Lasko and a consortium of banks, have so far only been filed by financial firms, among them the Mid Europa, Warburg Pincus and TPG funds.

The paper adds that Croatian food group Agrokor, whose grocery subsidiary Konzum is a direct rival of Mercator, remains the only potential strategic investor, but is still putting together its bid.

Agrokor, which had mounted several unsuccessful attempts at taking over Mercator before, recently asked the Slovenian Competition Protection Office to okay in advance its possible acquisition of Mercator.

The Croatian company is said to have EUR 700m available for the takeover operation in the form of a syndicated loan secured by several European banks: Austira's Erste and RBA, Germany's Deutsche Bank, French bank Societe Generale, Italy's Intesa Sao Paolo, Unicredit and Mediobanca, and Swiss bank UBS.

Poslovni dnevnik notes that in the spring, when Lasko was planning to offload its 23.4% in Mercator, the bids by investors mostly corresponded to Mercator's price on the the Ljubljana Stock Exchange. The current price does not reflect the real value of the company, whose market capitalisation stands at around EUR 0.5bn.

London-based ING bank, which is collecting the bids in the capacity of a consultant, sent notes about the bidding procedure to everyone who had expressed interest in Mercator in the past.

The shares being sold include the 23.4% still held by troubled Lasko as well as stake by banks that seized Mercator shares as collateral after a failed MBO attempt at Lasko.

Reflecting on Agrokor's strategy, Slovenian daily Dnevnik recently quoted unofficial sources as saying that banks that are ready to finance Agrokor's takeover of Mercator want to have clear upfront signals by competition watchdogs across the region where Agrokor and Mercator are present that they will not object to the market concentration.

Another explanation, according to Dnevnik, could be that Agrokor is using the concentration notification procedure to undermine and delay the sale.

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