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Mercator Announces Takeover Intention for Pivovarna Lasko (adds)

Ljubljana, 22 December (STA) - The management of retailer Mercator announced on Thursday an intention to take over beverage company Pivovarna Lasko. The move comes as Lasko was in the process of offloading a 23.34% stake in Slovenia's leading grocer.

Mercator said it had already informed the Securities Market Agency (ATVP), the Competition Protection Office (CPO) and the management and worker representatives of Pivovarna Lasko about the intention.

The target company said in a press release it would examine the intention in the following days, adding it would act in line with the legislation and possible decisions of the regulatory bodies.

The Mercator management meanwhile said that a strategic tie-up with Pivovarna Lasko could produce numerous positive economic and financial effects.

The retailer, who will hire legal and financial advisors to draw up the takeover bid, said it would finance the takeover from its own funds as well with the shares from the authorised capital and its own existing shares.

According to Mercator, the International Finance Corporation (IFC) and other international financial institutions could participate in the takeover.

Mercator believes that it is able to carry out financial restructuring in the indebted Pivovarna Lasko by 2013. It said it would present detailed plans in the takeover prospectus.

According to public broadcaster TV Slovenija, Mercator would need EUR 500m to acquire Lasko - EUR 100m to purchase Lasko shares and EUR 400m to cover the brewer's debt. The report moreover put Mercator's debt at EUR 1bn, while also stressing that its real estate holdings are estimated at EUR 1.7bn.

The bid comes just as Lasko is mulling to sell its 23.34% stake in Mercator together with a consortium of financial institutions, which own another 28.76% in the grocer to the Croatian food group Agrokor.

The biggest single owner of Lasko is the state-owned NLB bank with 23.9%. Hypo Alpe Adria Bank owns a 7.2% stake, Probanka bank 7%, Gorenjska banka bank 6.3%, Banka Celje 2.1%, and the NKBM bank 1%.

The group's capital stood at EUR 155m at the end of September, while financial debt amounted to EUR 389.7m. The reported working capital deficit was at EUR 38.6m.

The state-run KAD fund sent yesterday a request to Pivovarna Lasko to call a shareholders meeting which would discuss a capital injection of up to 50% of the company's capital or EUR 18.2m over the next five years.

Outgoing Agriculture Minister Dejan Zidan meanwhile told the STA that "Pivovarna Lasko is a very important company for the food sector, and I wish that it has a stable owner."

An intention to publish a takeover bid for Pivovarna Lasko was also published on Tuesday by Eatons Capital, a Las Vegas-based company.

The announcement made it more difficult for the beverage group to approve the sale, since Slovenia's takeover legislation requires companies to seek approval of shareholders for all major transactions when they are the target of a takeover offer.

However, the ATVP said on the following day that the takeover intention by Eatons Capital is invalid, which means Lasko supervisors can authorise the management to sell Lasko's shares in retailer Mercator.

Lasko supervisors were expected to hold a session to decide on the sale of Mercator shares to Agrokor on Friday. The session has been postponed for the end of the next week.

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