ANSA makes offer for remaining shares in Berger Jamaica
ANSA Coatings Inter-national Limited offered on Thursday to buy all outstanding minority share-holders' stake in Berger Paints Jamaica at $10.88 per share, well below the stock's current trading price.
Berger Jamaica traded at $15.81 on Wednesday, but had dropped by nearly $3 to $13 by midday Thursday. The bid price is a 31 per cent discount on Berger's closing price on Wednesday.
The bid would cost Trinidad-owned ANSA Coatings $1.14 billion to buy up the 48.99 per cent of Berger shares held by minority owners at the offer price. Shareholders may opt for payment in foreign currency at US$0.08485 per share.
The Financial Gleaner reached out to four brokerage houses for comment, with at least two managers expressing initial surprise at the offer. But both declined to go on record without formally researching the data.
"I need to review it," said one representative.
"My research department has to respond," said the other.
Scotia Investments Jamaica Limited is the lead broker for the offer with Hart Muirhead Fatta as legal adviser. The offer opens on September 7 and closes September 28.
ANSA Coatings is a wholly owned subsidiary of Trinidad & Tobago conglomerate ANSA McAL Limited. The company argued in its bid circular that the offer price for the Berger Jamaica shares represents the equivalent price it paid for the 51 per cent holding in the Jamaican operation, amounting to 109.3 million shares of Berger Jamaica, under the transaction to acquire Lewis Berger (Overseas Holdings) Limited, LBOH.
ANSA bought the regional paint operation from LBOH's ultimate parent, Asian Paints of India, in a deal finalised a month ago on July 24.
"The offer price represents what ANSA McAL Limited and the offeror have determined is a fair price for the shares of Berger Paints Jamaica indirectly acquired in the LBOH acquisition," stated the circular.
ANSA also argued that the fundamental price on which the initial wider LBOH transaction occurred was itself fair. The circular stated that LBOH transaction was an open-market, arm's length transaction by two knowledgeable paint companies.