Slovenes are asking: ‘Who is to blame?’

The majority of the Slovenian public remains opposed to the sale of Mercator to the Croatian concern Agrokor, although resistance is less than before, as shown by the results of a survey published on Monday by Ljubljana’s Delo.

To the question of whether they support the sale of Mercator to Agrokor, 72 percent of respondents answered negatively, 21 percent positively, and 7 percent did not respond. The survey was conducted at the beginning of last week on a representative sample of 404 respondents.

The leading Slovenian newspaper reminds that in several of their surveys from previous years, when the Croatian concern also highlighted its offers in the sale processes of Mercator, the opposition of the Slovenian public to the possibility of the largest Slovenian retail chain being taken over by its regional competitor was pronounced.

Delo’s survey from January 2011 showed that at that time, 80 percent of respondents were against the sale of the majority stake in Mercator to the Agrokor concern, and political resistance was also very present, so the owner of the concern, Ivica Todorić, later withdrew his offer, which was then 231 euros per share.

Agrokor signed a Purchase Agreement for 53.12 percent of the shares of the Mercator d.d. business system with a consortium of 12 sellers, which includes Slovenian banks, funds, and the Pivovarna Laško (PL) group, on Friday after months of negotiations.

According to the agreement, Agrokor will pay 120 euros per Mercator share, which amounts to 240 million euros for 53.12 percent of Mercator’s shares or 452 million euros for a 100 percent stake in the company.

The completion of the transaction is subject to relevant regulatory approvals, successful restructuring of Mercator’s debt, and other agreed conditions, and it is expected that the transaction could be completed this year.

In recent days, Slovenian media have pointed out not only the positive synergy effects of creating the largest retail company in Central and Eastern Europe, with 60,000 employees and annual revenues of 7 billion euros, but also the psychological aspect of the operation due to the significance of Mercator in the consciousness of the average Slovenian.

Through years of growth and expansion of its network in the region, Mercator has, in a way, become a successful symbol of the business results of the entire country, which has only recently faced economic difficulties.

The long-time director of Mercator, Zoran Janković, did not wish to comment on the agreement of the majority owners with Agrokor these days, but he reiterated that he had long believed that Agrokor would take over Mercator, and not the other way around, while macroeconomist Jože Mencinger expressed sadness that Mercator would fall into the hands of a regional competitor.

Former director of Mercator, Miran Goslar, stated on Saturday for Slovenian radio that emotions should be excluded from discussions about the sale of Mercator, but they have been quite present in the public and media these days, raising the question of responsibility for those who prevented negotiations in which Agrokor offered owners 221 euros per Mercator share at the end of 2011 and the beginning of 2012, significantly more than the now agreed 120 euros.

In this context, the culprits are sought in the former managements of Mercator, which resolutely opposed the sale in recent years despite the interest of the owners, in the doctrine of the so-called national interest that advocated a strong connection between state banks and large companies and opposed foreign capital. The most answers are sought from politicians whose words, even if informal, decided the direction in which Mercator would develop.

Economist Jože P. Damijan, a former minister of development in the first Janša government, stated on Sunday that it has been clear since 2005 that Mercator would sooner or later have to be sold to a foreign strategic buyer, and that this has now finally happened in the ninth attempt to sell the majority stake in Mercator.

In his widely read blog among economists, Damijan states that the ownership structure of Mercator was destabilized in 2005 by the then government of Janez Janša, which sold “under the table” shares of two state funds in Mercator to later failing financial holdings led by then directors of Istrabenz and Pivovarna Laško (PL), Igor Bavčar and Boško Šrot, and that it was a political agreement that led to new indebtedness of those owners with banks, burdening Mercator to the point where its ownership structure could no longer be controlled.

-Bavčar and Šrot financed all their activities of taking over Mercator speculatively with bank loans, which then pulled them into the abyss- states Damijan.

After their holdings financially collapsed, and Bavčar and Šrot could not repay the loans, banks were forced to take over Mercator’s shares from them, which were represented as dead capital in their balance sheets, so the sale of those shares, despite contrary efforts and resistance in politics, was only a matter of time, claims Damijan.

He says that the shareholders who have now decided to sell their shares to Agrokor should raise the issue of criminal liability for the damage caused by being prevented from selling the shares earlier when they received more favorable offers, as they lost 380 million euros compared to Agrokor’s offer from a year and a half ago, which is more than one percent of Slovenia’s GDP, and that the culprits who prevented the sale can be easily identified.