World of Dolphins wants more shares in Dolphin Cove
The Stafford Burrowes-led Dolphin Cove Limited has called on investors to accept the offer from Mexico-based World of Dolphins, which will spend up to US$11 million (J$132 million) to acquire additional shares.
World of Dolphins wants to acquire just under 80 per cent of the total shareholding in order to allow the tour attraction, Dolphin Cove, to remain on the junior market of the Jamaica Stock Exchange (JSE). It will allow the company to continue to benefit from the tax break granted to junior-market listings.
"It's a good offer," said Burrowes in a telephone interview with Wednesday Business on Monday. "It represents a good multiple of earnings and in the long run the company should do well."
Burrowes said Dolphin Cove, which currently operates in Jamaica and the Cayman Islands, will continue to pursue its expansion drive in the Turks & Caicos Islands as well as St Lucia.
Last month, World of Dolphins, which operates in nine markets, acquired a 58.5 per cent share-holding in Dolphin Cove, mostly from Burrowes, for US$30.5 million.
Burrowes now holds roughly 11 per cent of Dolphin Cove, but that amount grows to 20 per cent when connected parties are factored in. According to an offer circular issued last weekend, neither Burrowes nor connected parties will sell additional shares. The remaining shareholding, totalling approximately 20.63 per cent, are held by minority investors. This means that even if they all accepted the offer, the aggregate holding of the World of Dolphins would not exceed 79.14 per cent, Burrowes told Wednesday Business.
"So under the lock-out agree-ment, we cannot sell more shares," he said. "It's not likely that [all minority shareholders] will sell all their shares. But even if they did, it would still be under 80 per cent, which will mean it will not be delisted."
World of Dolphins is offering to pay US$0.1338 per share to the minority shareholders.
"The offeror's immediate parent company, Dolphin Discovery, is now holding in a bank in Miami (BBVA Compass Bancshares Inc) approximately US$11.4 million to fund the purchase of shares tendered in response to this mandatory offer," World of Dolphins said in its circular, adding that the offer opens at 9 a.m. on December 18 and will remain open until January 8, 2016, subject to an extension.
World of Dolphins is incorp-orated in Barbados as a 90 per cent subsidiary of Controladora Dolphin, S.A. de C.V. (Dolphin Discovery) based in Mexico. Dolphin Discovery, in turn, is a wholly-owned subsidiary of the ultimate parent company, Dolphin Capital Company, S. de R.L. organised under the laws of Mexico.