Some investors believe that the companies have no future if they remain separate.
Some of pension funds believes that Podravka and Atlantic Group can survive in the future only if they merge. Considering the fact that pension funds are significant shareholders in both companies, more specific discussions on the merger have already started, reports Večernji List on August 2, 2016.
As early as 2009, Atlantic Group expressed its interest in taking over Podravka, but the state as a shareholder blocked that idea at the time. However, Atlantic Group has been mentioned as a potential investor in Podravka ever since. This time, if there is a specific agreement between pension funds, it would not be impossible that the state could get involved, since it recently started preparation for possible sale of its stake in Podravka.
Although many believe that acquisitions are always a better option than mergers because then it is known who is managing whom, the option of merger is more likely now, which is causing some concern within Podravka and the town of Koprivnica regarding the possibility of the loss of jobs. Also, it is possible that the company headquarter could be moved from Koprivnica.
In addition, this story seems illogical at a time when Podravka has better operating results. Zvonimir Mršić, the CEO of Podravka, said recently that Podravka was actually in a better position to take over Atlantic Group than vice versa. Therefore, some of the pension funds have devised a plan for a merger, allegedly by a swap of shares, since that would have the least impact on the stock prices of the two companies. That would mean that the share of the largest shareholder and CEO of Atlantic Group would fall to less than 50 percent.
“The logic for consolidation of related companies is clear, but this is a question for the shareholders of each company. As is well known, the state share in Podravka has not yet been offered for sale and Atlantic Group currently does not conduct any activities on this issue”, said Atlantic Group in a statement.
One of representatives of the pension funds said that they were thinking long term, and that is was very questionable whether two small companies with much stronger competitors could survive for a long time on the EU market. He added that the two companies were not competitors because they did not have the same range of products.
However, people in Podravka think that such a plan is not realistic and that its only goal is to save Atlantic Group. “Although it is a private company, Podravka is closely connected with the local community. Therefore, we can say that we believe that Podravka does not need a strategic partner because the company has good business results. That is why it seems to us that this is more about saving Atlantic Group”, said the mayor of Koprivnica Mišel Jakšić.
