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D&G expects to delist this week

Published:Sunday | March 27, 2016 | 3:00 AMSteven Jackson
File The Red Stripe Jamaica brewery at Spanish Town Road, Kingston.

Locally based brewery Desnoes & Geddes Limited (D&G), which trades as Red Stripe, will delist its stock from the Jamaica Stock Exchange (JSE) by month end.

It would remove the ability for the easy trading of the 117.6 million shares held by minority shareholders who did not to sell to beer giant Heineken, which sought all outstanding shares.

That amount outside the control of Heineken equates to 4.2 per cent of the company and worth almost $3 billion.

The JSE told Sunday Business recently that the company applied for voluntary delisting.

It resulted last Tuesday in a release from D&G, which indicated that its board of directors passed a resolution for the company to make an application to the JSE to delist the company's securities with effect from March 31, 2016.

The JSE indicated that the company could have remained on the JSE despite having less than 20 per cent in the public hands due to an amendment to the rules on listing.

The combined market value of those shares is about $2.89 billion. It last traded at $24.

Heineken had sought to acquire all the 2.8 billion outstanding shares in Red Stripe. It needed to hit a threshold above 80 per cent in order to follow through on plans to delist the beer stock.

The JSE stock continues to trade periodically.

Its current trading price has fallen below the J$30 (US$0.259) at which Heineken offered to buy.

Last November, Heineken announced plans to spend up to US$194 million to acquire all outstanding shares in D&G.

This followed its purchase of Diageo Plc's 57.9 per cent shareholding in the company on October 7, a deal that took Heineken group's stake to 73.3 per cent at the time. The acquisition of Red Stripe formed part of Heineken's drive to grow its earnings in faster growth markets outside of Europe.

steven.jackson@gleanerjm.com