Mercator Abandons Plans to Take over Laško

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.

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