Istanbul, Jan. 17 - Turkey's Koc Holding said no bids it received for its supermarket chain Migros were below the retailer's market value, prompting Migros shares to trim earlier losses.
But Migros continued to underperform the wider market as analysts speculated that the offers may not be attractive enough to its minority shareholders.
Shares in Migros had fallen 6.1 percent in the first trading session on Thursday, after Reuters, citing sources familiar with the situation, reported on Wednesday that Koc had received three bids for Migros and at least two valued the firm below its market value.
"No offer received is below the company's market value," Koc Holding said in a statement to the stock market on Thursday while trading was closed for lunch.
After the statement, Migros trimmed its losses to stand 4.2 percent weaker, while the main share index fell 2.0 percent. Koc was 4.3 percent lower at 1253 GMT.
Losses in Thursday's first session cut Migros' market capitalisation to 3.56 billion lira ($3.02 billion), according to Reuters data, from 3.90 billion lira at Tuesday's close. The lira has also weakened sharply this week.
"Saying that it's not below market value is not saying much at this point in time," said Finans Invest analyst Mehmet Colakoglu.
"Even an offer 5 or 10 percent above market value is not likely to be perceived positively by the market as it would not be an attractive offer for minority shareholders when controlling stake premium as well as the time value of holding Migros shares ahead of a possible tender call offer are taken into account," he said.
Press reports earlier this month said the sale of Migros could value it as high as $4 billion.
The three bids, according to the sources, came from private equity firm Kohlberg Kravis Roberts & Co LP (KKR), which bid alone; BC Partners and Turkish private equity group Turkven which submitted a joint offer; and Croatian food group Agrokor which bid with private equity firm Blackstone.
Migros stock fell sharply last week after France's Carrefour and Turkish conglomerate Sabanci Holding pulled out of the bidding. Analysts said Carrefour had been seen as likely to be aggressive bidders and were concerned that financial investors would bid less.
Minority shareholders cannot be squeezed out after tender calls in Turkey, making it difficult to take a firm private, as private equity companies tend to want.
Koc, the largest company in fast-growing Turkey, is selling a 51 percent stake in Migros to concentrate on four core businesses: autos, energy, finance and consumer durables.
Analysts say that retail has a lower operating profit margin and return on equity than Koc Holding overall: according to nine-month results Migros saw a 18.6 percent return on equity compared with 29.4 percent for the group.
But analysts and bankers also say the consumer sector is among the most attractive in EU candidate Turkey, as investors can benefit from a young, fast-growing population and increasing wealth amid economic growth around 5 percent.