Merger of Dnevnik and Večer Called Off

By , 31 Aug 2020, 11:52 AM Business

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STA, 28 August 2020 - The merger of Dnevnik and Večer, the publishers of the third and fourth largest daily newspapers in Slovenia, respectively, as per 2019 data, has come to a halt, Dnevnik's owner Bojan Petan of publisher DZS and Večer's co-owner Uroš Hakl have confirmed.

Petan implied at Dnevnik's general assembly on Thursday that there were disagreements over ownership, whereas Hakl told the STA today that the reasons for putting the merger on hold were a matter of business.

According to Kristjan Verbič, the president of the VZMD association of small shareholders, Petan explained the situation in more detail at the meeting.

After the Competition Protection Agency (AVK) gave a green light for the merger in July 2019, the necessary proceedings were meant to be launched. Petan said at the time that the go-ahead was only the beginning of long-lasting and legally complex procedures though.

The break-up operation of the limited company Dnevnik was envisaged, pending a nod from its supervisors and stakeholders, said Verbič.

Newspaper Dnevnik would be turned into a subsidiary which would merge with Večer. Other Dnevnik editions would remain under the core company, which would not participate in the merger. Both newspapers were meant to continue being published as separate papers.

Petan, Dnevnik chairman, announced a meeting which would address the issue after the AVK green light, but such a discussion has not yet taken place. The merger was supposed to be finished by now though.

As quoted by Verbič, Petan explained on Thursday that the procedures got complicated after an independent value estimate of newspapers Dnevnik and Večer was requested. The estimate showed that Večer was worth some EUR 100,000 more than Dnevnik.

According to a previous agreement the companies would share ownership of the new entity called DV Mediji and Petan suggested Dnevnik contributed additional EUR 100,000. However, out of reasons unknown to him, Večer no longer agreed to that or to shared ownership and wanted a stronger share, said Verbič.

Petan told Dnevnik stakeholders on Thursday that the situation could be only the other way around since Dnevnik had been recording good results and had seen only a 2-3% drop in revenue.

He also highlighted that the AVK go-ahead remained, implying that the story could get an ending.

Rumours about the deal breakdown have been circulating, however Hakl has been denying any claims about that. Today, he was reticent about the situation, only saying that the procedure was put on ice.

Hakl later spoke to the STA to reject the allegation that the disagreements over ownership were the reason, saying instead that the true reason was an unrealistic appraisal of Dnevnik made on the basis of five-year business projections.

He said that these were made based on unrealistic costs of print and projections that revenue from advertisement marketing would grow by 10% a year.

"There is no media house globally which is capable of growing by 10% annually in advertisement marketing, let alone Dnevnik, which has recorded a noticeable trend of decreasing revenue from advertising," he was critical.

Hakl said he had no resentment and that Večer still thought that a merger made sense business-wise and that it would be a smart decision for the survival of both newspapers, "but in a professionally appropriate way".

The Maribor-based Večer, controlled by the no. 1 publisher Delo until 2014 when it was sold to entrepreneurs Hakl and Sašo Todorovič due to anti-trust concerns, has a circulation of about 19,000, according to 2019 data, and a strong subscriber base in the north-east of the country, while Dnevnik has a circulation of 21,000 and is considered more a central Slovenian or Ljubljana-based paper.

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