Ljubljana, 19 January (STA) - The management of Mercator, Slovenia's biggest retailer, has decided against publishing a takeover bid for beverage company Pivovarna Laško, citing risks related to the upcoming meeting of Laško shareholders as the reason.
The proposals for the 30 January meeting are a selection of "bitter pills" that Mercator as a prospective buyer could in no way "swallow", the company said in a written statement on Thursday.
One such risk is the proposal to increase share capital by up to 100% at the price of EUR 10 per share, which Mercator says is less than 30% of the fair value of the Laško share as appraised by the valuer commissioned by the Laško management.
Another risk is the possibility of issuing authorised capital in the amount of up to 50% of the company's share capital with the exclusion of preference shares and without set price parameters.
Laško shareholders will in addition decide on the sale of the brewer's 23.34% stake in Mercator as part of the sale of a combined 52.1% stake in the retailer to Croatia's Agrokor.
Mercator's management, which has been opposed to the sale, reiterates that the sale contract with Agrokor in parts derogates from market standards in favour of the buyer.
Mercator moreover decided not to publish a takeover bid for Laško due to the gap between the fair values of the Laško share as apprised by Laško and by Mercator. While the appraisers authorised by Laško set the value at EUR 34, Mercator's valuer set it at EUR 19.
"Considering the price and the value of all effects of restructuring and synergies, the Pivovarna Laško share does not reach the price of EUR 34 for the investor on the assumption that Mercator acquire at least a 75% share in the target company," Mercator said.
Considering the price disparities, Mercator does not expect the owners of major stakes in Laško or the management of Laško to deem bid below EUR 34 adequate, which is why it does not think the takeover with the target threshold of 75% is likely to succeed.
Mercator published its intention to take over Laško on 23 December, announcing a bid for all shares was to be published within 30 days.