Susan Gordon, Business Reporter

Salada Foods Mountain Peak brand of coffee. Mayberry has launched a rival $172 million bid for Salada Foods. - File

Mayberry Investments Limited is making a hostile bid for Salada Foods Jamaica, announcing Tuesday that it would pay $32.50 per share for 51 per cent of the coffee company's near 10.4 million issued ordinary shares.

The offer opens August 30 and closes September 28.

The bid rivals the Donovan Lewis-controlled Three Bears' offer of $25.82 per share.

Both bids are significantly below Salada's market price. The stock last traded at $45.

Mayberry said its cash offer, valued at approximately J$172.2 million, had long-term benefits for the company, including profitability growth potential.

Views vary

However, market analysts views varied on the offer. One speculated that the move to acquire a 51 per cent shareholding in Salada might be an attempt by Mayberry to prevent Three Bears from increasing its shareholding in Salada by as much as 80 per cent and subsequently delisting the company. Others felt it could diversify Mayberry's business and boost Salada's share price.

On August 17, Three Bears, which controls just over 60 per cent of Salada, made a mandatory offer of $25.82 per share to minority shareholders as required under Jamaica Stock Exchange takeover rules.

The offer was for the remaining 39.77 per cent of ordinary stock units in Salada. It also opens for acceptance on August 30 and closes September 28.

Three Bears, which is based in the British Virgin Islands, surpassed the 50 per cent threshold to trigger a mandatory take-over bid when Lewis or companies controlled by him acquired Three Bears from the Caribbean Invest-ment Fund (CIF) at the end of 2006.

The deal gave Three Bears 2,052,000 ordinary stock units in Salada. Lewis, through Three Bears, subsequently purchased a further 2,018,981, ordinary Salada stock units from the CIF.

The combined acquisitions gave Three Bears 60.23 per cent ownership of Salada.

"We are prepared to offer close to 26 per cent ($6.68) above the Three Bears' take-over offer because we believe that the acquisition of shares in Salada has sound, long-term benefit," said Mayberry CEO, Gary Peart.

"Salada presents the profile and profitability growth potential that we look for in companies to include in our acquisition strategy going forward, though it's continuing profitability is not a certainty," Peart added.