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Financial News

Jan 2011 Financial News

Pegasus minority share buyout offer opens today

Jan 19, 2011

Hotelier Kevin Hendrickson's offer to buy the remaining 40 per cent stake in Jamaica Pegasus Hotel for $635 million opens today and shareholders will have three weeks to decide if they want to sell before the stock is delisted.

The offer price to minority shareholders is $13.14 a share -- the same price at which Hendrickson bought the government's 60 per cent stake in November.

The offer on February 10,2011.

For certain, Pegasus will delist and "become a non-listed, privately operated subsidiary of Quivin", according to a letter of intent posted to the Jamaica Stock Exchange (JSE) on Wednesday, December 28, signed by Hendrickson with accompanying legalise.

The only thing not clear is how fast, which will depend on Quivin's stake surpassing hte 90 per cent mark.

Hendrickson has committed to buying all the remaining shares, which becomes compulsory after getting 90 per cent of the company, but he won't delist until that process is totally complete.

Otherwise, "Quivin's intention to procure that delisting will become effective shortly after the Offer closes".

The Hendrickson family currently operates the Courtleigh Hotel and Suites -- which is located beside the Pegasus and has 127 rooms -- and the 143-room Knutsford Court hotel in Kingston. The Pegasus therefore brought Hendrickson's room count in Kingston to 570 or 40 per cent of capacity in the Corporate Area.

The Hendrickson family also operates hotels in other areas in Jamaica, including the Sunset Beach Resort & Spa in Montego Bay, The Sunset at the Palms in Negril, Sunset Jamaica Grande in Ocho Rios, The Ruins at the Falls in Ocho Rios, Coconut Bay in St Lucia and Holiday Inn Sunspree in Montego Bay.

On November 29, 2010 Quivin Holdings purchased 71.9 million shares in the Pegasus from the government led National Hotels and Properties Limited (NHP) for $945 million, which resulted in roughly 60 per cent control.

"As a result of that acquisition, Quivin became obliged to make a mandatory offer for the remaining...issued shares of the Company," stated the letter.

Quivin, a St Lucian registered company, wholly owned by Kevin Hendrickson was incorporated in October 2010 "for the express purpose of acquiring the majority shares".

Hendrickson emerged as the successful bidder for the Pegasus at the end of an extensive and competitive bidding process, initiated by Scotia DBG Investments Limited on behalf of the Jamaican Government, stated the letter.

Jamaica Observer
Wednesday January 19, 2011