Fettered by a stop order on the trading of Barbados Shipping & Trading Company Limited (BS&T) shares, Neal and Massy Holdings Limited has extended its takeover offer for a month but remains locked in a legal fight with regulators that has left the deal in question.
The offer for BS&T shares remains open to December 17 — it was to have closed November 19 — pending resolution of the case in the Barbados High Court brought by the Barbados Exchange Commission to force a better offer price for BS&T.
But the extension also gives Neal and Massy breathing room to "evaluate its legal position", which the Trinidad company insists includes a right to withdraw its bid.
The Barbados Securities Commission (BSC) wants the Neal and Massy conglomerate to increase its takeover offer to B$9.04 per share, in line with the price paid by Neal and Massy for a block of ordinary BS&T shares acquired in October when ANSA's rival B$10 bid was also on the table.
Takeover benefits
That purchase boosted N&M's stake in the shipping company to 28 per cent.
At B$9.04 per share, Neal and Massy would - assuming full take up by the other 72 per cent of shareholders - pay just under B$443 million (US$221.45 million) for BS&T according to Wednesday Business estimates of the cash and shares offer denoted as Option A.
Option B prices BS&T at B$396.2 million.
The offer that Neal and Massy has on the table is at $8.50 per share which, again based on Wednesday Business estimates, puts the Option A offer price at just under B$428.3 million (US$214.14 million).
Essentially the price being pushed for by BSC could put B$25 million more into the pockets of shareholders. Sagicor, which has 11.5 per cent holdings in BS&T, has joined the regulator in its application.
The BS&T stock price on the Barbados exchange at suspension of trading was B$9.
Likely pullback
Neal and Massy is contesting the BSC's position, and while it has said it expects the regulator's legal bid to fall flat and "ultimately be dismissed", the conglomerate appears to be setting the stage for a likely pullback from the BS&T deal if events were to turn.
Not only has the BSC threatened an injunction preventing Neal and Massy from closing its bid at the current offer price, but actions of the Barbados government, the Trinidad company said in its statement, could materially affect the value of the shipping company making it less attractive as a takeover target.
N&M did not respond to a request for additional comment.
The Own Arthur administration has indicated that it will likely press ahead without BS&T on a big marina project at Pierhead in the Bridgetown capital that both were initially expected to partner on.
Citing delayed action by BS&T, Arthur at the top of the month announced he would likely acquire the property compulsorily and said his government was not unwilling to take the lead on the development project.
N&M, said if the Barbados government followed through on the Pierhead lands acquisition, it could affect BS&T's financial position and dilute the commercial gain anticipated from the takeover.
"Neal and Massy considers that these developments, individually and cumulatively, entitle it to exercise its rights of withdrawal and/or rescission under the provisions of the offer," said the company's weekend statement.
The Trinidad company has been wooing BS&T for some time. Their betrothal was announced earlier this year, and their merger to form the Caribbean's largest conglomerate appeared certain up to the point where ANSA McAL entered the picture in July with a hostile takeover bid.
Pullback consequences
The subsequent rivalry derailed the merger, notwithstanding the backing of the BS&T management and board for the Neal and Massy partnership.
But Neal and Massy, which in August made a second try with its own taker offer, would emerge as the sole suitor after ANSA's withdrawal in October.
A pullback by Neal and Massy now would represent for the company a second failure in its targeted acquisition.
Prior to ANSA's hostile bid which was repriced several times to reach B$10 per share before its withdrawal, the BS&T share traded at a high of B$7.50 on the Barbados exchange and at TT$17.01 in Trinidad.
The stock is now valued at B$9 and TT$28.35 on the respective exchanges.
business@gleanerjm.com
