Berger owner rejected, plans to get on with business
ANSA Coatings International Limited got just over three per cent more of the Berger Jamaica shareholdings, a result that signalled overwhelming rejection of its bid to buy up the outstanding shares in the paint company.
It increases the Trinidad company's ownership in Berger Paints Jamaica Limited to 54.12 per cent, well shy of the mark that would have allowed it to trigger a delisting of the stock, and even further off the trigger point to force holdout shareholders to sell.
ANSA Coatings made a mandatory offer for the outstanding 48.99 per cent of minority Berger shares this month, in compliance with the market's takeover rules. The company came into indirect ownership of the Jamaican operation when it acquired Lewis Berger Overseas Holdings in July.
The Jamaican offer for 104.99 million Berger shares at $10.88 or US$0.08485 per share closed October 9 after one extension. The results were publicised on Thursday.
However, at least two investment houses had deemed the offer underpriced. Mayberry said it fell nearly 38 per cent below the stock's medium-term valuation, while NCB Capital Markets valued the stock at around $11.62.
One of the largest minority owners, the Ideal Group, had suggested that $18 would have been a better offer.
ANSA Coating - whose investment adviser, Scotia Investments Jamaica, said it closed the transaction on Tuesday, October 18 - needed at least 19-20 per cent more Berger shares to get beyond the 80 per cent ownership required to take the company private. At 90 per cent, it could have forced the remaining shareholders to sell.
The tone of ANSA Coating's press advertisement on the results of the bid does not seem to indicate that it is interested in pursuing another offer. The company said its bid complied with stock market rules and that it would now turn its attention to enhancing the paint brand.
"We thank all those who facilitated the successful completion of this mandatory regulatory process and look forward to working with our regional teams in enhancing the business experience for our shareholders, customers and distributors," the ad said.
Donovan Lewis, founder and chairman of the Ideal Group, which holds 11.61 per cent of Berger Jamaica shares, said he was not interested in selling his shares, but "just like anyone else," if he got a good offer he would take it.
"If they really want more, they can make a proper offer," he said.
Requests for comment from another large shareholder, Sagicor, which holds 10.3 per cent of Berger Jamaica, and to Norman Sabga, the executive chairman of the ANSA McAL Group of Companies, were unanswered up to press time.
CORRECTION: This article has been updated to correct the shareholdings of the Ideal Group to 11.61 per cent.