MERCATOR, d.d., Ljubljana

Sale of 100% ownership share in the company M - Hotel, d.o.o.

On September 19th 2007, the company Poslovni sistem Mercator, d.d., signed a purchase agreement on the sale of 100 % ownership share in the company M - Hotel, d.o.o.

Operations of the company M-Hotel, d.o.o., include catering and hotel services. Mercator decided to dispose of the company consistently with its strategy to focus on its core activity, i.e. the FMCG retail.

Enclosed with the public announcement is the fairness opinion on transaction and terms of sale from the viewpoint of the company Mercator, d.d., and its shareholders.

This public announcement will also be published on the company website at www.mercator.si.

Date: 20. 9. 2007