Due to the low price, Hanfa rejected the PIK-ESOP offer for the acquisition of PIK Rijeka shares

The Management Board of the Croatian Financial Services Supervisory Agency (Hanfa) has rejected the request of the Rijeka company PIK-ESOP for approval to publish an offer for the acquisition of Rijeka PIK d.d. due to the low minimum price offered to minority shareholders.

According to Hanfa’s assessment, the minimum price that PIK-ESOP should have offered to minority shareholders is 134.99 kuna, not 49.00 kuna as stated in their request. The buyout price per share offered by the majority shareholder is 2.8 times lower than the minimum price determined by the regulator according to the Companies Act (ZPDD), Hanfa stated on Friday.

Hanfa reminds that in April last year, it issued a decision ordering Gino Pastorčić, Igor Borovac, and the company PIK-ESOP to publish an offer for the acquisition of Rijeka PIK.

Namely, Igor Borovac and Gino Pastorčić indirectly acquired 40.23 percent of shares in PIK-ESOP during 2019, thereby gaining majority control over voting rights and the share capital of PIK. Despite this, they did not publish the legally required takeover offer, prompting Hanfa to order them to submit a request to protect other shareholders.

PIK-ESOP subsequently submitted the request within the required timeframe, but Hanfa does not accept the price offered as it was not determined in accordance with the provisions of the ZPDD regarding the minimum price and harm to minority shareholders.

As they explain, the law states that the price cannot be lower than the highest price at which the offeror and persons acting in concert with him acquired shares with voting rights in the year preceding the obligation to publish the takeover offer, including the acquisition on the basis of which the obligation to publish the takeover offer arose for the offeror and/or persons acting in concert with him.

Considering that Igor Borovac and Gino Pastorčić acquired business shares in PIK ESOP at nominal value, thereby indirectly acquiring shares of PIK, it follows that Igor Borovac and Gino Pastorčić also indirectly acquired PIK shares at a price corresponding to the price of acquiring business shares, i.e., the nominal value of business shares, Hanfa states.

The value of business shares in PIK ESOP was determined in relation to the value of PIK shares contributed to the share capital of PIK ESOP, and at the time of acquiring the business shares on the basis of which the obligation to publish the takeover offer arose, it amounted to 134.99 kuna.

On March 14, 2022, PIK ESOP stated that the price of 134.99 kuna determined by Hanfa as the buyout price for PIK shares was not correctly established and therefore would not change the text of the takeover offer and requested the suspension of the procedure.

If no takeover offer is published to minority shareholders of PIK Rijeka, they may file a lawsuit with the competent court to protect their rights, i.e., to conclude a contract for the sale of shares under the conditions and at the price that, according to Hanfa, should have been published in the takeover offer, it is concluded in Hanfa’s statement.