Lascelles identifies 'preferred' buyer for Globe Insurance
Lascelles deMercado & Company says it has found a buyer for Globe Insurance Company Limited but that there is yet no binding agreement to sell.
The potential buyer, which Lascelles did not name, is doing its due diligence checks on Globe. The Financial Gleaner understands from different sources that the company showing interest is Trinidadian.
The pending sale of Globe comes amidst persistent chatter that the Trinidadian government, which owns 87 per cent of Lascelles was interested in offloading the group, or at the very least its non-core assets, to recover bailout funds poured into the Jamaican company's former parent, the CL Financial group, three years ago.
Lascelles is a spirits conglomerate with businesses in rum, wines and sugar, as well as general insurance, transportation services and general merchandise.
Globe is a J$5.8-billion company measured by total assets, including J$2 billion of cash, and a profitable member of the Lascelles group, which is itself worth J$37 billion by assets.
Last year, when Lascelles' annual profit dropped 24 per cent to J$2.36 billion at yearend September, Globe's rose 47 per cent to J$448m at yearend December, despite a slight dip in top line revenue to J$2.4 billion.
several companies interested
Lascelles said in a market filing Wednesday that several companies had shown interest in Globe, but again no names were disclosed.
However, Financial Gleaner checks indicate that the GraceKennedy group, which owns a rival insurance company, JIIC, had initially been among them. GK Group CEO Don Wehby said his company was part of the group showing early interest, but later decided not to pursue the acquisition.
Lascelles said that on the instruction of the board one of the interested parties was identified as preferred party to negotiate a deal.
".. There has been no final decision to sell Globe and neither is there in place any binding commitment on either side to proceed with any transaction at any price," Lascelles said.
Guardian Holdings chairman Arthur Lok Jack referred queries on whether his company was the interested buyer to CEO Jeffrey Mack.
Mack, however, offered Guar-dian's standard response that the company does not comment on mergers and acquistions.
Asked what due diligence of an acqusition target would entail, he said the company's financial performance, claims reserve, investments, human resources, its risk management and other key risk factors.
The process could last two weeks to six months depending on the size of the operation, Mack said.