V&W attempts takeover of W.Kruk

Polish clothing retailer Vistula & Wolczanka (V&W) shocked the market with its bid to buy 66 percent of W.Kruk, the oldest jewelry producer in Poland.

"We are aiming to build the most prestigious company in our market," said Rafał Bauer, president of V&W. The company plans to become the largest luxury goods group in Poland. Besides its own-brand jewelry shops, W.Kruk owns upscale clothing brands.

"Neither the management nor the Kruk family plans to sell shares in the tender, which they consider an attempt at a hostile takeover," Piotr Piechowiak, W.Kruk's financial director, told Reuters.

"We did not know about Vistula's plans. There was no [previous] agreement between us," said Piechowiak. "However, the offer confirms that we are a profitable company."

On Friday, the firm's management issued a statement saying that the founding family, which holds a 28-percent stake, could pull out of the firm if other shareholders accepted the current offer.

Although V&W's offer was a surprise for W.Kruk, Bauer explained that the offer complied with the law on public companies. "We did not want to tell anyone about our plans or talks with W.Kruk, because it could have been perceived as a threat or pressure," he said.

"The [potential] synergy is obvious enough," said Maciej Bombol, a fund manager at Millennium TFI, which holds a five-percent stake in W.Kruk. "Creating a retailer out of two well-managed companies operating in the upmarket segment makes sense," he added.

V&W's proposal offered zł.23.7 per share, which was 5.5 percent higher than W.Kruk's closing price the day before. For 12.18 million shares of the firm's stock, Vistula would thus pay zł.289 million.

W.Kruk's and V&W's share prices rose by 4.5 percent (to zł.23.48) and 2.6 percent (to zł.8.75) respectively on the news, but there was no evidence as to whether shareholders would sell.

Vistula's offer will remain on the table from May 14-27.