Asesoft eyes Flamingo's distribution division

Businessman Sebastian Ghita, owner of the Asesoft group, one of the top players on the local IT & C distribution market, is negotiating the takeover of Flamingo International household appliance retailer's distribution division.

The information comes as the retailer is in the spotlight on the Bucharest Stock Exchange (BVB), after it emerged that Alexandru Ion Tiriac, the son of businessman Ion Tiriac, one of Romania's wealthiest people, owns 5.12 percent of Flamingo International, following transactions made in the past few weeks on BVB. The 5.12 percent stock is worth €0.38 million, calculated at a RON 0.0419 (€0.0098) per share price tag - the value of shares in yesterday's trading session.The company's quotation rose as much as 15 percent yesterday at noon, after the deal was announced. This is the maximum daily hike allowed on the Bucharest stock market.

Dan Adamescu, owner of Bucharest-based Unirea Shopping Center, also became a significant shareholder of Flamingo, with almost 20 percent of the shares. The two business people control almost one quarter of Flamingo International - almost equal to shares owned by its founder, businessman Dragos Cinca. Adamescu paid only several million euro for his stock in Flamingo.
A possible association between Adamescu and Tiriac Jr. could mean a hostile takeover attempt in the case of the third-largest local household appliance and IT product retailer.

Flamingo's quotation on BVB tumbled some 90 percent last year, but the share price rebounded by mid-February, when Adamescu started buying heavily. So far, the stock has recovered some 70 percent. On the stock market, the Flamingo business is seen as a very risky bet. The stock "could do even worse or, possibly it could be several times more profitable," the manager of a top brokerage company said. "The price of Flamingo stock is low at present and, because we are talking about a company with no debts to banks and a restructured and efficient management, it is indeed an investment opportunity, in view of a market rebound," according to businessman Florin Andronescu, founder of the Flanco retailer, later acquired by Flamingo International.

Business Standard