Jul 2008 Financial News

AIC increases stake in CVM

Jul 25, 2008

Michael Lee Chin's AIC Limited has acquired additional stake in CVM, growing the Canadian-based company's share well beyond the initial 51 per cent acquired two years ago, informed sources say.

The Financial Gleaner was unable to confirm, however, that Lee Chin's mutual fund company now controls as much as 91 per cent.

Wayne Chen, chairman of CVM and brother to Lee Chin, though initially saying he would comment, did not address the television group's ownership structure.

Meantime, Financial Gleaner sources have also indicated that One Caribbean Media had attempted to buy out the remaining minority partners of CVM, but the arrangement fell through after discussions with AIC.

Rights issue

Neville Blythe, the former owner of the group and a board member with the largest minority shareholding in the company, told the Financial Gleaner that AIC would have increased its stake through a rights issue that made 200 million shares available to shareholders at 50 cents per share.

None of the minority partners took up additional shares, Blythe told the Financial Gleaner.

He said, while he retains the same number of shares he had after the acquisition, the rights issue would have reduced his 20 per cent holding in the company. He would not, however, say what proportion of the company he now owns.

"I haven't sold any shares to him," Neville Blythe told the Financial Gleaner when asked about his former 20 per cent stake in the company.

Offer

He said the minority partners, who at the time controlled 48 per cent of CVM, came close to selling out to the Trinidadian-based One Media Group, which made an offer to the minority shareholders some three months ago.

"We were hoping to sell our shares but that didn't work out," explained Blythe adding that the meeting with AIC was the snag on the possible deal.

"We accepted the deal but AIC thought it was not compatible with the business," added Blythe.

The rights issue, though it was first mentioned two years ago, was done after the One Caribbean deal was scuttled, Blythe said.

The other minority shareholders are Douglas Graham of Palace Amusement Company Limited and Lennie Little-White.

The rights issue was initially proposed to raise an additional $100 million from the creation of 200 million shares to broaden CVM's equity base.

Blythe, who was then majority owner through his company the United General Insurance group, had proposed to list the company on the Jamaica Stock Exchange after that exercise.

Blythe subsequently sold 51 per cent of CVM to AIC, at an undisclosed price, but which was said to be around $250 million.


Source:
Susan Gordon, Business Reporter
susan.gordon@gleanerjm.com
Jamaica Gleaner
Friday July 25, 2008

http://www.jamaica-gleaner.com/gleaner/20080725/business/business3.html