Čakovečki Mlinovi Will Pay Dividends Based on the Counterproposal of the Pension Fund, Takeover Offer Announced

Two important things marked yesterday for Čakovečki Mlinovi – the General Assembly voted unanimously for the payment of dividends for last year and for 2022, despite the Management’s proposal to retain the net profit for last year; the other thing is that the company Mlin i pekare together with the funds (all co-owners of Čakovečki Mlinovi) also announced a binding offer for the takeover of the company yesterday.

The decision to pay dividends to shareholders from the net profit for 2023 and to pay dividends from part of the retained earnings achieved in 2022 was made based on the counterproposal of Allianz ZB (the Management’s proposal was to retain the net profit from 2023). Allianz ZB did not specify how much of the total net profit should be paid to them. Although it initially ‘sounded’ like the leading shareholders disagreed about (non)payment of net profit due to the Management’s proposal, yesterday’s unanimous vote for payment disproved that.

Namely, when the company Mlin i pekare (MIP), owned by the Plodinec family, took over the ownership package of Čakovečki Mlinovi, it did not exclude the possibility that misunderstandings would continue at least to some extent, which the funds had with the previous co-owners Stjepan and Ružica Varga. However, instead, the new co-owners established cooperation with the funds. But after the Management sent a proposal to the General Assembly to retain the profit, a worm of doubt appeared that misunderstandings had indeed occurred among the co-owners. Therefore, we asked the main shareholders in July what was happening, but Allianz ZB and Josip Plodinec (owner of the Plodinec company and co-owner with his wife Dragica Plodinec of MIP) claimed that there were no misunderstandings.

And there are no misunderstandings

The unanimous decision on the payment of dividends ultimately confirmed that. Thus, shareholders will receive a dividend of 0.10 euros per share, which represents a total amount of 1,029,000 euros. This is the total value of the dividend for last year and the year before. Looking at the years, for last year, a total of 856,423.59 euros will be paid to shareholders, while from the part of the retained earnings achieved in 2022, 172,576.41 euros will be paid. All this money will be received by shareholders on September 26 of this year.

Additionally, the leading shareholders sent a binding offer for the takeover of Čakovečki Mlinovi. Namely, the Croatian Financial Services Supervisory Agency (HANFA) announced this week that it approved the publication of the offer for the takeover of all shares of the Čakovečki company not held by the offerors, thus definitively closing the circle after Mlin i pekare and Plodinec took over the ownership shares of Stjepan Varga in that company.

Before that decision, the Competition Protection Agency (AZTN) assessed at the end of July that it can be reasonably assumed that in this specific case there is no prohibited concentration of MIP and Čakovečki Mlinovi (indirectly neither of the Plodinec company) in terms of the Competition Protection Act (ZZTN).

In the decision made by HANFA on August 26, it is stated that together with the companies Mlin i pekare (MIP) and Plodinec (co-owner of Mlin i pekare), the request for the publication of the offer was also sent by AZ mandatory pension fund (categories A and B) and PBZ Croatia osiguranje (categories A and B). Together, they hold 64.53 percent of the shares in Čakovečki Mlinovi.

The obligation to publish the takeover offer arose on September 25, 2023, when the offerors concluded an agreement on the regulation of mutual relations, establishing joint action aimed at acquiring and achieving joint control over Čakovečki Mlinovi, which is in accordance with the Takeover of Joint Stock Companies Act (ZPDD).

Individually, Mlin i pekare has 24.78 percent of the shares of the Čakovečki company. The funds managed by Allianz ZB hold 22.92 percent of the shares, while the funds managed by PBZ Croatia osiguranje have 16.83 percent of the shares, which together makes 64.53 percent of the ownership share.

Restructuring of Companies

As expected, they offered the remaining shareholders the buyout of each share at a price of 10.91 euros, which was also stated in the decision made by HANFA (at the same time, this is how much MIP paid for the shares of Stjepan and Ružica Varga). The intention is to achieve 75 percent of the shares for the purpose of amending the company’s Statute to establish a corporate governance system adapted to the joint control of the mentioned offerors over Čakovečki Mlinovi.

The duration of this takeover offer is 28 days from the date of publication of the offer in the Official Gazette and on the websites of the Zagreb Stock Exchange, with that period starting from the day after the publication. After that, the new owners plan to consolidate the operations of the MIP Group and the Čakovečki Mlinovi Group to increase competitiveness and optimize costs. The restructuring will connect the operations of both groups, with the initial increase of the Čakovečki Mlinovi’s capital.

The capital will be increased by the contribution of assets and rights (after a new General Assembly meeting is held) by MIP and the Plodinec company (the latter is not a direct owner of Čakovečki Mlinovi) and the decision to exclude the preemptive rights of all other shareholders of Čakovečki Mlinovi in full. The intention is that Čakovečki Mlinovi will issue new shares for the contributed assets and rights, according to their estimated values, which will be taken over by MIP and Plodinec in the appropriate ratio according to the value of the contributed assets and rights.

As the offerors state in their offer, all the mentioned processes will not affect the employment status of workers either in Čakovečki Mlinovi, or in the Mlin i pekare Group, or in the Plodinec company.

Additionally, the offerors also announced changes in the Management, about who will come and who will leave, we will only find out once all the mentioned procedures are completed.