By Patrick Hoyos
BRIDGETOWN, Barbados, Monday December 7, 2015 – The battle for Banks is over and the winner is Anheuser-Busch InBev’s major Brazilian subsidiary, AmBev.
According to a shareholders’ circular issued by the Banks Holdings board on Friday, AmBev, through its subsidiary SLU Beverages acquired just over 50 percent of the shares in the storied Barbados brewery last week when it agreed to purchase close to 6.5 million shares at $7.10 on the floor of the BSE. Once the trades are settled, BHL will become a part of the world’s largest brewer of beer, Anheuser-Busch InBev.
Meanwhile, rival ANSA McAl has given itself an exit strategy by raising by its offer to $7.20 per share but add by for the first time the condition that it must get at least 51 percent off he shares or the offer would be rescinded.
According to the BHL board, that would be arithmetically and impossible unless AmBev sold some of its Banks shares to its rival for the company.
That is unlikely to happen.
Ambev’s acquisition of control over BHL means it would have purchased around two thirds of the 15 percent of shares so far changing hands on the BSE. This suggests that ANSA has the other five percent, which when added to its shares acquired from the purchase of Blue Waters Holdings, would bring its stake in BHL to around 18 percent at present.
The BHL circular advises remaining shareholders not to pledge their shares to ANSA, stating that the requirement for 51 percent was unattainable, and instead it should sell to AmBev, which it directors were doing with their own shares.
In its most recent offer for the BHL shares, which is dated Dec. 2, ANSA McAl varied its offer by increasing the price set to Bds$7.20 for each common share and by stating “it may be withdrawn by the Offeror if an aggregate number of Common Shares representing not less than fifty one percent (51%) of the Common Shares that are outstanding and not already owned by the Offeror are not tendered to the Offer.”
The Offer was open for acceptance until January 11, 2016.
In its circular, the BHL board clearly considered this new condition to be a game-changer. It said: “The AMC Amended Offer No. 3 introduces, for the first time, a condition of a minimum requirement of shares to be tendered to AMC.” It continued: “Due to the trades on the floor of the BSE on December 2 and 3, 2015, SLU on settlement will control just over 50% of the outstanding share capital of BHL. This means that the condition introduced by AMC in the AMC Amended Offer No. 3 cannot be satisfied unless SLU decides to sell shares it already owns to AMC. We have no information to suggest that this is foreseeable.”
Added the circular: “It is now arithmetically impossible for AMC and its affiliates to acquire 51% of the shares in BHL without a sale of shares to them by SLU. The introduction of the new condition by AMC in respect of the minimum share percentage requirement therefore provides a means for AMC to exit from their intended take-over of BHL.”
Finally, the BHL directors’ circular advised that “Shareholders who may have already tendered their shares to AMC should therefore now withdraw their shares using the procedures provided for such in the AMC take-over bid circulars, thereby enabling them to accept the recommendation above or such other option they deem appropriate.”
The opinions expressed in this commentary are solely those of Pat Hoyos. This article is exclusively republished with the permission of Pat Hoyos and appeared in the Broad Street Journal. Pat Hoyos is a business writer and publisher of the Broad Street Journal.