The announcement by Eatons Capital that was made on Tuesday does not count as a takeover intention in line with the takeovers act, which means it entails no consequences under that law, the Securities Market Agency (ATVP) told a press conference on Wednesday.

"The ATVP has received a fax of the so-called takeover intention, something that this document is not," ATVP director Damjan Zugelj told the press in Ljubljana.

The announcement by the Las Vegas-based company of its intention to publish a takeover bid for Lasko within 30 days lacks a signature and a stamp. Moreover, the document was faxed from a post office in Trzin, a town in central Slovenia, with no reference to authorisation.

The intention was also not made public properly, as it should have been published in a daily with nation-wide circulation.

The ATVP has launched proceedings to establish whether this is a case of market manipulation, which carries a fine of EUR 25,000-125,000, or up to EUR 370,000 in case of a grave violation. Prison sentence of up to three, or in grave cases of up to five years, is also envisaged for abuse of financial instruments.

Zugelj said that foreign regulatory bodies and other law enforcement bodies in Slovenia would be involved in the investigation of what may be a crime.

The Las Vegas-based company was reported by the business daily Finance to have been dormant for the past two years. Referring to the Nevada business registry, the paper reported that Eatons Capital had lost the right to transat business over failure to meet its obligations, which can happen in case of faulty reporting or failure to pay the annual fee.

The publication of the takeover intention and "written warnings by the majority owner" were the reasons cited by the state-owned NLB bank on Tuesday for the supervisory board's decision to postpone the decision on the sale of a 10.75% stake in Mercator.

The supervisors of Lasko, who were also expected to endorse the sale of the company's 23.34% in Mercator
yesterday, decided to postpone the final decision on the sale until Friday.

Lasko and NLB have been trying to offload their stakes in Mercator as part of a consortium selling a combined 52.1% stake in Slovenia's biggest grocer. The sellers have been in exclusive talks with Croatia's Agrokor, Mercator's biggest rival in the region.

A report in the daily Dnevnik said that the police were following the developments related to the sale based on suspicions of criminal offences. The sale is also being pored over by the Corruption Prevention Commission due to risks of corruption and suspected violation of integrity and corruption prevention act.

The outgoing Agriculture Minister Dejan Zidan, who has repeatedly expressed his concerns about the possible negative impact of Mercator's takeover by Agrokor, on Monday urged the Corruption Prevention Commission to look into the matter. Suspicions of corruption have also been voiced by trade unions.

Zidan and Finance Minister Franc Krizanic expressed their expectations today that all elements of the sale would be examined before the proceedings related to the transaction are resumed.

Krizanic said that "a hostile takeover would have major negative consequences for the Slovenian agriculture, food processing industry, banking market, GDP, the labour market and consequently the general government deficit".