Slovenia Allows Agrokor to Acquire Biggest Balkan Retail Chain

Agrokor d.d. of Croatia got regulatory approval to take over Mercator Poslovni Sistem d.d., the largest retail chain in the Balkans.

“We have studied if the Mercator sale would hurt the retail market here and have concluded that wouldn’t be the case and have no objections to this transaction,” Slovenian competition regulator head Andrej Krasek said at a news conference in the capital Ljubljana today.

Zagreb-based Agrokor signed an agreement with Mercator owners in June to buy a 53 percent stake in the Slovenian retailer for 240 million euros ($327 million), or 120 euros a share. Mercator owners are drinks company Pivovarna Lasko d.d. and Slovenian banks including Nova Ljubljanska Banka d.d.

Agrokor’s takeover bid is its fifth to buy its biggest competitor in the Balkans. Croatia’s biggest company with interests in food production, retail and press distribution last offered 221 euros per Mercator share in 2011, valuing the retailer at 832 million euros, before abandoning the bid in early 2012 amid opposition from Slovenian politicians.

Shares Slump

Mercator shares slumped to the lowest level in more than 11 years today on speculation the Croatian investor will fail to get financing to close the takeover. The stock closed down 6.2 percent at 75 euros and volume amounted to 513 percent of the three-month average, data compiled by Bloomberg shows.

“Investors for many reasons aren’t ready to bet” that this takeover will succeed, Saso Stanovnik, an analyst at Alta Invest in Ljubljana, said in an e-mail today. “The reasons are past experience with the Mercator sale and stories in local media about a lack of financing for the deal.”

Agrokor spokeswoman Anja Linic declined to comment on the Mercator takeover when contacted by phone today.

The Croatian company plans to increase Mercator’s capital and may sell Mercator shares in a public offering next year while merging retail operations into Adria Retail that will be completed by the end of 2014, Finance newspaper reported in June, citing Agrokor President Ivica Todoric.

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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