According to a statement made by Luka Ploce on the Zagreb Stock Exchange, their largest shareholder (Energia Naturalis) has to make a takeover bid after passing the 25% threshold.

Originally, PPD bought 15% of Luka Ploce from the State in October 2014. By 2016, this was increased to 24.9%. In May 2018 PPD’s stake was transferred to Energia Naturalis (PPD’s mother company). On 16 January 2019, Energia Naturalis acquired another 2,848 shares of Luka Ploce, increasing the total stake to 25.62% and passing the 25% mandatory bid threshold.

The bid price is not yet known and subject to regulatory approval. According to Croatian legislation, the bid price needs to be the higher of:
a) the 3-month price average on ZSE and
b) the highest price at which the buyer acquired stakes within the last year.

According to our own calculation based on ZSE trading data, Energia Naturalis’ share acquisition on 16 January 2019 was done at HRK 368 per share. The 3-month average price stands at HRK 343 per share.

Calculating with HRK 368 per share, we get P/E of 75x and EV/EBITDA of 8.3x. As a comparison, Luka Koper is now traded at 8.5x P/E and 5.0x EV/EBITDA.

A quick look at Luka Ploce’s financials shows that they still need to put a lot of effort into hiking returns. In 2011 the company did a HRK 168m capital increase for investment needs. A slow use of the proceeds resulted in a very low ROE (average below 1%). The port lacks scale and is further pressured by low economic activity in its surroundings. However, a major project is underway – the construction of the petroleum products terminal which might make the port an important regional hub and hopefully help overcome the profitability issues.