The director of the Slovenian retail chain Mercator, Toni Balažič, stated on Thursday that the potential value of the company is far greater than the current stock price on the exchange.
-Mercator is a high-value company, but this potential cannot be realized overnight, rather it takes time and restructuring, and the current price does not reflect its potential value- said Balažič in an interview with the Slovenian Press Agency STA.
After it was announced that the owners of 53 percent of Mercator’s shares, which are banks and Pivovarna Laško (PL), received only two binding offers for their stakes and that the Croatian concern Agrokor is reportedly offering around 110 euros per share, the price of Mercator’s shares on the Ljubljana Stock Exchange fell this week to the lowest level in the last ten years, amounting to 96 euros on Thursday.
Balažič told STA that the decision to sell the majority stake is in the hands of the owners, but that if it does not happen, it would be best to give the current management a few years to restructure Mercator and increase its value.
In the event that a sale does not occur, Mercator should seek new synergy in partnership with a larger retail company outside the region as it would bring procurement savings, said Balažič.
Reducing procurement costs by just one percent would bring Mercator 23 million euros in savings, which was its annual profit before the crisis, explained Balažič the synergistic effects of a possible consolidation of procurement with a larger retail company in Europe.
