On Saturday (23 November 2019), Mesna Industrija Pivac published an announcement on their website stating that they have signed a Sale and Transfer Agreement with Kraš ESOP, through which they acquired an additional 18.45% stake in Kraš.

The mentioned amount refers to all shares of Kraš ESOP which were acquired for HRK 238.1m or HRK 861.2 per share (assuming only shares were acquired, and not the entire ESOP company with its entire balance sheet). Such a indicative price per share equals to the volume weighted average of all prices realized on the stock exchange in the past 3 months and in the same time more than double what MI Pivac offered in their takeover bid.  With this acquisition, MI Pivac currently have a 49.16% stake in Kraš and 51.8 % of voting rights (5.1% of shares are in treasury).

Besides the mentioned agreement, MI Pivac, Kraš ESOP and Sindikat PPDIV also signed the Agreement on social partnership, through which additional obligations of Pivac were defined (such as: confirming their further investment in development of Kraš, the continuation of respect and protection on the level of employee rights and maintaining production facilities at the existing locations).

Kraš YTD Share Price Performance & Turnover (HRK)

The Saturday’s news came right after the expiry of takeover bid by MI Pivac. As a reminder, on 24 October MI Pivac published a takeover bid, offering HRK 430 per share. At the moment, there is no official statement by MI Pivac or Kraš on the outcome of the takeover bid but one can safely assume that at such prices Pivac did not acquire a significant stake in the company. The mentioned takeover bid of HRK 430 per share translates to P/E of 12 and EV/EBITDA of 7. In comparison, the acquisition of ESOP shares translates into P/E of 23.9 and EV/EBITDA of 12.7 (again assuming only KRAS shares from ESOP were acquired)

From the market perspective, in the last 2 trading days Kraš once again observed a strong increase in turnover amounting to HRK 27m (cumulatively Thursday and Friday). Trading was concluded at HRK 1050 per share – a price which we have now seen for more than a month (with the exception of 25 October) and which translates into P/E of 29.3 and EV/EBITDA of 14.6.

It is safe to assume that the primary buyer of the shares on the market is Kappa Star Limited. We are eager to see how the recent development regarding the shareholder structure will translate into the stock exchange dynamics.