The Board reasons that the potential takeover by Mesna Industrija Braća Pivac would have a positive effect on the future operations of Kraš, as the synergistic effects which could lead to cost reduction.

Kraš published an announcement on the Zagreb Stock Exchange in which the Board stated their opinion regarding the recent takeover bid by Mesna Industrija Braća Pivac.

As a reminder, takeover bid was announced at HRK 430 per share, which represents a discount to market price of 41%. Note that the takeover bid puts it at P/E of 12 and EV/EBITDA of 7, while the share is currently traded at P/E of 29.3 and EV/EBITDA of 14.6. The bid is valid for 28 days, since its announcement.

The Board states that they deem that the takeover bid is low, as the highest share price in the 3-month period preceding the takeover bid obligation amounted to HRK 505 per share, while after the obligation, the share was even traded at HRK 1,090 per share.

The management further states that considers it undeniable that the synergistic effects of negotiating the procurement of goods and services from the Group’s perspective could have a positive effect on cost reduction and, therefore, its competitiveness. They therefore reason that the bid by Mesna Industrija Braća Pivac would have a positive effect on the future operations of Kraš.

As we prior stated, since the takeover price will be offered at such a high discount, it is reasonable to assume that the takeover will not be successful.