Finance Minister Refuses to Sell the Government Stake in Hajduk

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Minister of Finance: Hajduk is invaluable.

After the retail chain Tommy, owned by Tomislav Mamić, offered to purchase 9.82 percent of the shares of the Hajduk Football Club which are owned by the State Agency for Deposit Insurance and Bank Rehabilitation, the Supervisory Board of the Agency, led by finance minister Boris Lalovac, has decided to reject the offer. That decision has led to two questions being asked: was it a good decision for the government to refuse the investment offer, and what is the current market value of the club, reports Jutarnji List on September 2, 2015.

Lalovac has said that his position at the recent session of the Supervisory Board was that “Hajduk is invaluable and that its shares are not for sale”, which was the reason why the offer by Tommy was rejected. On July 17, Tommy sent a letter of intent to the Agency offering to buy 9.82 percent of shares (52,690 shares) of Hajduk which are owned by the Agency at the price of 10,327,240 kuna. The letter of intent states that, although the nominal value of the package was 26,350,000 kuna, certified auditor’s report shows that on 31 December 2014, the capital stock of Hajduk was worth 135,063,365 kuna, which means that 9.82 percent of the shares was worth around 13,263,222 kuna.

Economic analyst Damir Novotny said it was obvious that Boris Lalovac made the decision on the basis of his personal opinion as a football fan of Hajduk, and that a government minister should not behave like that. “The government and its ministers should make decisions on privatization of state property on the basis of rational analysis and the plan of management of state property and not on subjective opinions”, said Novotny. On the other hand, the Tommy’s offer raises the question of the current market value of the club.

If the market value of Hajduk were to be evaluated in accordance with the offer, 100 percent of the shares would be worth around 105 million kuna. If we add a “premium” for the takeover of the majority or even a one hundred percent stake in the club, the price would increase to 120 or 150 million kuna. However, it is very difficult to talk about realistic estimates of the market value of Hajduk, especially when, on the one hand, the prevailing opinion is that “Hajduk is priceless”, while on the other hand the financial-investment calculation of an investor claims that Hajduk is now worth about 60 percent of its nominal value, 100 to 150 million kuna at most.


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