Emperia Jumps as Zachodni Sparks Talk of Stokrotka Sale

Emperia Holding SA (EMP), a Polish consumer-goods distributor, jumped to a nine-month high after Bank Zachodni WBK SA recommended buying its shares on speculation the company will sell its grocery chain Stokrotka.

The shares surged as much as 8.3 percent and closed 8.1 percent higher to 60.9 zloty in Warsaw, climbing to the highest level since May 25 and valuing the Lublin, Poland-based company at 921 million zloty ($289 million). Zachodni raised its recommendation to buy from hold with a share-price estimate of 79 zloty.

Emperia “is not interested in selling Stokrotka” as it “has decided on its long-term development,” Artur Kawa, chief executive officer of Emperia, said in an e-mailed response to questions sent by Bloomberg News today. Emperia last year rejected all bids for Stokrotka when it tried to sell the chain operating 201 outlets in Poland, it said in a statement July 9.

“Many major, international players are investing huge amounts just to secure the highest possible market share in this still attractive and developing market,” Tomasz Sokolowski, an analyst at Zachodni in Warsaw, said in a note today. “We regard Stokrotka - Emperia’s core retail asset - as an ideal takeover target.”

The takeover of grocery chain Eko Holding SA (EKO) by Advent International Corp. last year may be an “ideal benchmark” for a sale of Stokrotka, Sokolowski said. Advent paid 3.9 times Eko monthly sales while “the market is currently valuing Stokrotka at around 1.9 times,” according to Zachodni estimates.

In December 2011, Emperia sold part of its distribution assets to domestic competitor Eurocash SA (EUR) for 1.1 billion zloty.

To contact the reporter on this story: Piotr Bujnicki in Warsaw at pbujnicki@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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