Ljubljana - The shareholders of the retailer Mercator, which is 90% owned by the Croatian group Fortenova, decided today to buy out small shareholders at EUR 36 per share. An association of small shareholders, which had proposed EUR 204.33 per share, announced a lawsuit and a review in court regarding the appropriate amount of severance.

Mercator has been part of the Croatian group since April, when its shares were transferred from the bankrupt conglomerate Agrokor, which had acquired the largest Slovenian retailer in 2014.

After a September meeting of shareholders, which approved a EUR 5.97 million capital injection in the form of conversion of a part of Fortenova's claims into capital, the group has owned 90.005% of Mercator, after previously owning 89.11% of Mercator.

In order to squeeze out small shareholders, which own a total of 621,251 shares of Mercator, Fortenova is to pay just under EUR 22.4 million.

The Pan-Slovenian Association of Small Shareholders (VZMD), which had proposed EUR 204.33 per share, said that EUR 36 was a gross underestimation of the value of a Mercator share.

Lawyer Andrej Švencbir, who represents some of small shareholders in Mercator, said that the market value was higher, with the current price of a Mercator share on the Ljubljana Stock Exchange standing at EUR 40.

The VZMD has meanwhile estimated that Mercator is worth between EUR 800 million and EUR 1 billion, and Švencbir noted that in 2018, Agrokor had estimated the value of Mercator at EUR 820 million in its annual report.

At such a value, Mercator should offer at least EUR 200 per share to buy out small shareholders, he said, adding that this meant roughly EUR 10 million in damage to small shareholders and also to state revenue.

Fortenova will not pay income tax as it is is registered in the Netherlands, Švencbir explained, adding that the VZMD would file within 30 days a lawsuit so that a court would determine the appropriate amount of severance.

According to him, several other minority shareholders have also announced lawsuits.

By squeezing out small shareholders, Mercator can withdraw from the stock market and be sold, Švencbir said, adding that "we are sure that they already have a buyer, and the purchase price could remain a secret."

The VZMD is also challenging the mentioned capital injection in Mercator. "If we succeed with that lawsuit, then the conditions for today's buyout of small shareholders do not exist in the first place," Švencbir said.

It is precisely with the September capital injection that Fortenova exceeded the 90% threshold required for squeezing out small shareholders, he explained.