May 17 (SeeNews) - The management and trade unions at Croatian port operator Luka Rijeka [ZSE:LKRI] said that the takeover bid launched by the newly-established Port Acquisitions company, raises a number of questions regarding the viability of development plans.
According to those plans, the main condition for increasing the Rijeka port's annual throughput capacity to 60 million tonnes of cargo is the construction of a new Zagreb-Rijeka railway line - a potential development that depends neither on Luka Rijeka, nor on Port Acquisitions and which is far away from even being launched, the management of Luka Rijeka said in a filing to the Zagreb Stock Exchange last week.
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Besides, Port Acquisitions expects the segment of container traffic to grow the most, by minimum 10% to 15% per year, without saying what these expectations are based on. Luka Rijeka does not hold a concession on the container terminal, therefore the company can only benefit from growth of container traffic in terms of increase of container depots and that's only an unclear estimate, the management added.
The potential buyer also envisages to double the capacity of the Rijeka port to some 20 million tonnes of dry cargo per year based on “big investments” in the development of the port planned by the end of the concession deal in 2042. However, this capacity increase is part of investment plans already adopted by the port operator itself.
“Since the takeover bid does not include any indication of possible investments in cash and any investment dynamics, it is unclear how and when the bidder intends to invest in the company it is acquiring, immediately or after the end of the concession deal,” the management noted.
The management considers that the alleged competence of the bidder in port management does not represent a professional know-how necessary to make the existing business plans of the company happen, the management of Luka Rijeka said.
In a separate statement, representatives of trade unions at Luka Rijeca said that the takeover bid is based only on partial estimates and assumptions, like the one for the construction of a railway. They also said it's unclear how the bidder’s plans would affect the number of jobs and the current rights of employees.
Port Acquisitions, fully owned by Czech industrial group CE Industries, launched the takeover bid for the 65.58% interest it does not already own in the Croatian company earlier this month, offering to pay 8.40 euro ($9.08) per share. Port Acquisitions has become obliged to make the bid since March 14, when its shareholding interest in the Croatian company reached 34.42%, exceeding the legally defined threshold of 25%.
Intraday on Wednesday, Luka Rijeka’s shares traded flat at 8.20 euro on the Zagreb bourse.
($ = 0.925 euro)