ANSA down, but not out
Company ready to move on from BHL
Trinidadian conglomerate ANSA McAl may have lost the bidding war to acquire Banks Holdings Limited (BHL, but that has not dampened its appetite for expansion in Barbados through more acquisitions.
The President and Chief Executive Officer of ANSA McAl (Barbados) Ltd, Nicholas Mouttet, told reporters today that while he was personally disappointed his company did not acquire majority interest in BHL, they looked forward, nevertheless, to continue doing business on the island for many years to come “as vibrant members of the local business community”.
ANSA McAl’s latest offer for BHL at $7.20 per common share, though 10 cents more than its rival’s, proved to be less than favourable as shareholders of the local brewery and beverage company chose to go instead with the Brazilian-based company AMBEV.
The Latin American brewery giant last evening announced that through its subsidiary, SLU Beverages, it had acquired 6,054,354 BHL shares at $7.10 per share last Wednesday on the floor of the Barbados Stock Exchange (BSE), effectively increasing its shareholding in BHL to just over 50 per cent.
At a news conference, Mouttet acknowledged that ANSA McAl now had the option of disposing of its BHL shares, but said he was currently “assessing the situation and it is now something we now have to consider”. However, he has not ruled out the possibility of acquiring any aspect of BHL’s business, which includes the manufacturing of dairy products and juices, if they became available.
“I am not in a position to say whether or not AMBEV is interested in selling off those parts of the business, but certainly if they do decide to sell, . . . certainly we will consider it. Those are parts of the business that did interest us.
“We were interested in all of Banks Holdings business, including dairy, the juices, [and] Coca Cola business,” said Mouttet.
Mouttet said while it would have been “great” for ANSA McAl to own the Banks brand, the company would continue to examine “other options in terms of brewery options outside of Barbados”.
“The truth is that this group is always looking at opportunities for possibilities of expansion through acquisition,” he said.
“At the time that this bidding process started, we were actually considering other options in Barbados and throughout the region and it is part of our growth strategy and we are always looking at that,” he added.
“I am not in a position to share with you what those companies may be, but we are always looking for opportunities and there continues to be opportunities in Barbados.”
Mouttet continued: “Personally, I don’t like not winning but from a company point of view, it is a huge loss not to have the brand of Banks in our portfolio. Banks would have been a jewel in our portfolio alongside our other regional brands, whereas with AMBEV portfolio, it will be, at least right now, fairly insignificant in size . . . . They may place value in it, but numbers wise it is a lot less significant to AMBEV than it is to us,” he argued.
Mouttet anticipated that with AMBEV now having majority shares in BHL, it would produce some of its other products here and therefore competition could increase. However, he pointed out that ANSA McAl had a number of products in Barbados that were performing well and he remained confident they would continue to do so.
In 2007, ANSA McAl was also unsuccessful in its bid to acquire the then Barbados Shipping and Trading Company Limited (BS&T). That company was acquired by another Trinidadian conglomerate, the then Neal & Massy Holdings Limited, now Massy Group.
“On two occasions, we have come to the market and our actions have resulted in shareholders maximizing their value far beyond anything that they probably ever considered,” said Mouttet. “When we started, the Banks shares were $2.50. AMBEV is buying at $7.10, which is [almost] three times the market value at the time, thanks to essentially our action. The same thing occurred with BS&T.”
Mouttet could not say immediately what the bidding war had cost his company over the near three-month battle, but he was certain it was “in the millions of dollars”. This would include legal, consultancy fees and fees for other professional services.
ANSA McAl and BHL are expected to return to the Court of Appeal on Friday for the hearing of ANSA McAl’s appeal of the November 14 decision by Chief Justice Sir Marston Gibson to lift a one-week injunction, which blocked the sale of BHL.
ANSA had argued then that AMBEV had an unfair advantage in the takeover bid because of a controversial exit clause in a 2010 agreement between BHL and SLU.
Asked if the court case was still relevant since AMBEV now had majority shares in BHL, Mouttet said “the matter is still before the court and I am not in a position at this point to say anything on that matter”. However, he said “in due course” an announcement of the company’s intention would be made.