Serbia-based Idea for sale to Slovenians - Agrokor gave best offer for Mercator

- Croatian Agrokor has given the best non-binding bid of all eight bidders for takeover of the share of 36% in Mercator - Slovenian newspaper Dnevnik wrote.

Although other Slovenian media wrote that the potential buyers would, probably, not offer "convincing prices" because of Mercator's total debt of 1.1 billion EUR, Dnevnik learns from its sources that Agrokor has given significantly higher bid than the private capital funds that answered the banks' invitation.

It is assumed that these eight bidders are the world's powerful investors who attended the meeting in Ljubljana two weeks ago, such as Bain Capital, CVC, Blackstone, Mid Evrope, Goldman Sachs, Merrill Lynch, KKR, as well as Croatian Agrokor.

Slovenian daily newspaper Finance.si analyzes the possibility that Ivica Todorić's Agrokor becomes the owner of its biggest competitor in the Balkan market. The newspaper concludes that Todorić will experience big difficulties with the Market Competition Protection Agency in Croatia if it buys Mercator. On the other side, after taking over the majority share, the company could transfer part of the costs of takeover to Mercator by selling to that Slovenian company some of its non-profitable markets such as Idea in Serbia, which registered 30m EUR worth of losses in 2008.

Concerning the fact that Mercator, after it took over Getro, has the market share of 9% in Croatia, it is a big question whether AZTN will allow the concentration of Konzum and Mercator. According to Finance.si, Todorić's problem is Agrokor's debt, which reached 2.38 billion EUR, while Mercator owes 1.1 billion EUR.

After purchasing 36% of Mercator, the winner on the tender would also have to give a public offer for the remaining stocks, and since it is speculated that Pivovarna Laško wants to sell its shares, the majority package can be easily acquired. The banks that sell the stocks of Mercator want to cover the loans of Boško Šrot's Infond and Istrabenz, which can only be done if the offer amounts to 160 EUR per stock. Mercator's market value is 628m EUR.