The Slovenia Times

Gorenje climbing fast on stock exchange after takeover news


Deals worth EUR 730,000 were wrapped up with Gorenje by noon, with the item's value approaching the 12 euro per share offered by Hisense under the condition that it would be able to buy 50% plus one share.

AleŇ° Lokar of asset manager KD Skladi argued for the STA that the 12 euro price, which translate to EUR 146.5m for 50% plus one share, had more to do with the buyer's wish to access the European market than it did with Gorenje's real value.

"It is hard to find justification for such a price in Gorenje's business operations," Lokar said amid speculation that rival bidder Haier, which allegedly offered 10 euro per share, could up Hisense's once it becomes official.

Hisense was one of three Chinese companies to have submitted binding bids, which Lokar sees as a sign Chinese white goods producers are looking for access to European and US markets.

Lokar also believes "the deal is less certain than it seems at first glance".

"The timing is interesting, right ahead of the general election. This is one of the biggest employers in the country and in an environment that is very sensitive to ownership changes," he said.

"Moreover, such large transactions entail major changes in supply chains, which would have a significant impact on the Slovenian economy. This is why I still see quite a few obstacles."

Lokar also touched on the fact that the state-owned KAD fund as the largest single Gorenje shareholder cannot sell its 16.37% stake, since Gorenje is not slated for sale in the national strategy on asset management.

He believes it would make sense for KAD to withdraw in the case of a successful takeover and redirect the proceeds to a more productive investment.

While KAD could also raise its stake above 25% to increase its decision-making power in the face of a new majority owner, Lokar said "this would not be sensible from the perspective of business logic".

"Gorenje and its industry in general are not highly profitable, struggling with overcapacity around the world," he argued.


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