SARAJEVO (Bosnia and Herzegovina), September 15 (SeeNews) – Austrian investment company CID Adriatic Investments GmbH (CID) said on Thursday it has purchased a 39.9% state stake in Bosnian tobacco factory Fabrika Duhana Sarajevo (FDS) for 42.7 million marka ($24.6 million/21.8 million euro) in a public auction held on the Sarajevo bourse.
CID's bid was deemed the most favourable after the company offered to pay 83.5 marka apiece for a total of 511,478 shares in FDS held by the government of Bosnia’s Muslim Croat Federation, CID said in a statement.
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The funds for the transaction were provided to CID by British American Tobacco (BAT), which, in a separate release, confirmed its involvement. BAT also said it will enter into exclusive negotiations with CID on the possible purchase of a part of FDS's tobacco business.
"Any deal to buy part of the tobacco business will be subject to due diligence, as well as obtaining all necessary regulatory approvals", BAT said.
Following Thursday's transaction, CID is legally bound to submit a mandatory takeover offer for the remaining shares in FDS. It noted it will offer an equal 83.5 marka for each share it does not own. The funds for this takeover offer will also be provided by BAT.
CID also said that the possible purchase of FDS by BAT provides much better opportunities for the future performance of the Bosnian company compared to those it could achieve as an independent unit.
Last year, BAT purchased Croatian tobacco company Tvornica Duhana Rovinj (TDR) for 505 million euro ($568 million).
The Federation is one of the two autonomous entities that make up Bosnia and Herzegovina. The other one is the Serb Republic.
(1 euro= 1.95583 Bosnian marka)