Banks DIH Limited says its recent sale of shares in Barbados beverage conglomerate Banks Holdings Limited (BHL) was both “financially and commercially advantageous” and will increase shareholder value.
In a press release issued yesterday, Banks sought to clarify the sale, which was seen as key to a takeover of BHL by Brazilian beer giant AmBev, and it noted that its directors were guided by financial and legal advisors.
Banks sold its shares to SLU Beverages, a subsidiary of AmBev, for B$7.10 per share, which was ten cents over what Trinidadian conglomerate ANSA McAL was offering.
ANSA McAL remains a strong competitor with Banks DIH for the local market. Around a decade ago ANSA made what was perceived at the time to be a hostile takeover bid of Banks DIH.
Ironically, as a defensive measure against the takeover bid, Banks DIH and BHL acquired shares in each other. The ANSA bid did not succeed.
The Barbados Nation last week reported that ANSA McAL, which had spent millions to acquire BHL shares, was awaiting a ruling by the Barbados Supreme Court before making its next move.
The Nation’s report had stated that Barbados’ Chief Justice Sir Marston Gibson had on November 13th lifted an injunction to halt the trading of BHL shares paving the way for Banks DIH and others to sell their shares and eventually allowing AmBev to gain majority control. ANSA has challenged this decision. According to Banks’ release, the company sold 4,358,818 shares, equalling 6.7% of BHL’s issued capital, to SLU for B$7.10 per share (B$30,947,607 in total) on December 2nd.
It noted that accounting firm KPMG had advised that the upper limit of the valuation was B$5.60 per share.
The release did not contain any reference to ANSA McAL.
While the Barbados Nation report said the sale “sealed the deal for AmBev’s subsidiary SLU Beverages to get ownership of BHL,” Banks noted that at the time of the sale SLU only held 40.3% of the issued capital of BHL. With the purchase of Banks’ 6.7%, it moved its shareholding to 47%.
“Accordingly, it is not accurate to state that the sale by BDIH “sealed the deal” in terms of SLU acquiring majority ownership of BHL,” it added.
Banks noted that in keeping with the clauses in a Memorandum of Understanding between it and BHL, executed on February 15, 2005, prior to selling its shares in the company it had offered the first option to buy to BHL itself.
However, Banks noted that the Board of Directors of BHL determined that it was not interested in re-purchasing the shares and had no objections to Banks selling its shares to SLU Beverages Ltd.