Steven Jackson, Business Reporter
NCB Capital Markets, which was a lead broker to the Lascelles deMercado acquisition by Campari, wants local investors to channel the estimated US$40 million (J$3.7b) payout into NCBCM financial products.
It's the largest dividend payout in decades to local investors arising from the buyout by Italian Campari Espana SL in December.
The Jamaica Stock Exchange market capitalisation will fall as the exchange cannot easily absorb these funds into other equities, market experts previously told the Financial Gleaner. Lascelles accounted for J$37.4b or 5.8 per cent of the markets combined J$639b value at yearend.
In response, NCB offered "special" rates to investors receiving these dividends - estimated at US$40 million by NCB - in a bid to entice new clients.
"Yes we are always interested in garnering new clients and introducing as many Jamaicans as possible to our products. This was one such opportunity," said Najah Peterkin, regional manager, NCB Capital Markets.
"NCB Cap Markets was the lead broker for the Campari Espana/Lascelles de Mercado offer and we thought it strategic to align ourselves with the shareholders who accepted the offer and advise them of our product offerings. These product offerings vary in tenure and asset classes based on the prospective investor's profile. We have products for all types of investors," Peterkin said.
The specials include repo rates of up to one per cent above its regular rate sheet for both US dollar and Jamaica dollar currencies - which would total over 3.0 per cent for US instruments.
"For investors who are looking for a fixed rate of return we are offering a significant increase above our regular repurchase agreement rates placing our rates for this offer ahead of most of our competitors. We have significantly increased the rates across all tenures ranging from 30 days to one year," said the investment advisor.
Shareholders who accepted the Campari offer received dividends paid in US dollars for Lascelles stock. Peterkin said the JSE could not easily absorb the funds as there are not many "sellers of equity" in the market at this point in time which would facilitate the "absorption of this volume of liquidity".
On December 10, David Campari-Milano Group, attained some 99 per cent acceptance of its tender offer for all issued and outstanding ordinary and preferred shares of Lascelles deMercado.
Campari said it intends to exercise its right under Jamaican law to force acquisition of all the remaining shares, including from those shareholders who have not accepted the offer.
The total value of the shares acquired through the offer is approximately US$409 million. Campari planned to pay US$414.7 million for the entire 100 per cent shareholding at US$4.32 per ordinary share and US$0.57 per preference unit.
The acceptance will result in the delisting of Lascelles deMercado's shares from the Jamaica Stock Exchange.
The deal transfers one of Jamaica's oldest companies, J. Wray & Nephew Limited and its iconic Appleton brand, from Trinidadian to European ownership. Lascelles was sold by its Jamaican owners to CL Financial Group of Trinidad in 2008.