Končar has received an offer to purchase a 49% share in Advanced Energy Solutions, which has a 75.16% share in the joint-stock company Dalekovod, from Construction Line Limited. As a reminder, Končar has the remaining 51% share in Advanced Energy Solutions. The offer has been accepted by Končar, and as such, further details will be disclosed after regulatory approval.

On Tuesday, Končar published an announcement detailing an offer to purchase a 49% share in Advanced Energy Solutions. Advanced Energy Solutions holds a 75.16% share in Dalekovod. As Končar already has a 51% share in Advanced Energy Solutions, if the offer is accepted, it would have 100% in the Company, and thus full ownership in Dalekovod.

The offer was issued by Construction Line Limited (CL), which has the aforementioned share in Advanced Energy Solutions. Končar notes that this is in line with the strategy of consolidating ownership and acquiring control to fully integrate the Dalekovod Group into the Končar Group. Furthermore, Končar notes that this recognized Končar’s primary role as a strategic investor seeking to leverage the synergies between the two groups. As such, Končar has accepted the offer to purchase the share.

Upon meeting the obligations defined by the relevant legislation, which is a prerequisite for the completion of the transaction, including obtaining approvals for the transaction from the competent market competition authorities in all jurisdictions where such approval is required, CL and Končar Investments will proceed with the assignment and transfer of the business share. When the registration of the transfer is completed with the Court Register at the Commercial Court in Zagreb, the limited liability company Končar – Investments Ltd. will become the sole member of the limited liability company Advanced Energy Solutions Ltd.

As this announcement came on the day of Končar’s 9M 2023 results publishing, the trading of the Company’s share was stopped for a period of time, before resuming. In total, Končar’s share price surged by 10% on Tuesday, while on a YTD basis, it increased by 62%. Končar’s subsidiary, Končar D&ST also experienced a YTD price increase, with the regular share increasing by 122%, while the preferred share price grew by 124%.

Končar, Končar D&ST (regular, preferred) YTD share price performance (2023 YTD, %)

Source: Bloomberg, InterCapital Research