The shareholders of tissue maker Paloma have accepted the bid by Polish equity fund Abris Capital to acquire the company through a EUR 15m recapitalisation at EUR 3.3 per share.
Abris was endorsed as Paloma’s new owner after hours of deliberation despite Eco Fund of Slovakia raising its bid twice during today’s shareholders’ meeting to a EUR 18m recapitalisation at EUR 4.01 per share.
Even two Eco Fund officials who arrived from Slovakia during the meeting failed to persuade Slovenian Sovereign Holding (SSH) as majority owner of Paloma to take up their bid.
Unhappy with the outcome of the vote, the representative of minor shareholders, Nevena Tea Gorjup, who had submitted a counter-proposal favouring Eco Invest, announced she would challenge the decision at court.
Paloma CEO Tadej Gosak welcomed the decision as a “historic” day for Paloma saying it would give the company much needed capital to modernise production and improve logistic capacities.
He said that the company would also get a quality investor that would enable its future development, while he would not comment on the fact that the shareholders rejected the higher bid.
The only bidder to carry out due diligence on Paloma, Abris had already signed an agreement on the planned recapitalisation with the Paloma management in November.
SSH had also signed an accord with Abris at the time pledging to back its offer, unless a counter-proposal was made trumping its offer, but would not comment after Eco Invest made a counter bid later.
Commenting on why SSH as the owner a 71% stake in Paloma renounced larger proceeds from the sale, SSH chairman Marko Jazbec said today that they had all the necessary authorisations for such a decision.
“After a quality meeting with Eco Invest officials, we have come to the conclusion that apart from financial value of the bid and guarantees we must also seriously consider the likelihood of successfully implemented recapitalisation.
“We have come to the conclusion that based on the already signed agreements between Paloma and Abris there is a great likelihood the alternative proposal would not see a concrete outcome,” Jazbec said.
This was countered by Gorjup, who said that Eco Invest had funds in excess of those offered for the acquisition deposited with a foreign bank since 21 December.
Abris Capital Partners is a Warsaw-based private equity fund manager focused on mid-market opportunities in Central and Eastern Europe. It has raised over EUR 770m in capital.
The fund is backed by various leading global investment organisations, including corporate and public pension funds, financial institutions, insurance companies and US university trust funds.
Eco Invest, an industry buyer who is integrated into the Mondi group, had been eyeing Paloma in the past. Since it had already announced layoffs at the time, Paloma’s trade union has not been supportive of its bid.
Paloma would be the eighth on the list of 15 state enterprises that had been slated for privatisation in 2013.
Today’s decision caps years of search for a strategic partner and several failed attempts to privatise the company.
Based in the village of Sladki Vrh near the Slovenian border with Austria, Paloma employs some 700 people and puts out some 70,000 tonnes of tissue paper a year. It is present in more than 30 markets.
Building on a more than 140-year tradition, Paloma is one of the best known brands in the area of former Yugoslavia.
Source: The Slovenia Times
Photo: Paloma
