Aug 2011 Financial News

Lascelles to decide on offer by Friday

Aug 01, 2011

The minority shareholders of the Jamaican group, Lascelles deMercardo, will find out by Friday whether the board of the company recommends or denies the proposed US$333 million offer for 90 per cent of the company that it received from a group headed by its former managing director, William McConnell. Lascelles chairman Gerald Yetming said last night that the board of the conglomerate will issue a formal response to the offer by Friday after it receives advice from a team of legal and independent financial experts. Yetming is also the Government-appointed chairman of CL Financial. Meanwhile, the chief executive of one of the entities that has been identified as providing equity commitments for the proposed takeover of Lascelles deMercardo has described the offer as being “in the best interests of Lascelles’ shareholders and other stakeholders.”

The comment came from Richard Hurowitz, Chief Executive Officer of Octavian Advisors, the New York-based sponsors of the Octavian Special Master Fund. That fund, along with the Jamaican investment company Pan-Jamaican Investment Trust. Ltd and other regional entities, were identified in a statement on Thursday as being among the group of sophisticated investors providing equity commitment for the proposed US$333 million takeover of Lascelles deMercardo. In a statement e-mailed to the Guardian by a New York-based public relations firm, Hurowitz said: “We believe the offer is highly compelling and is in the best interests of Lascelles’ shareholders and other stakeholders.”
On its Web site, Octavian Advisors is described as a global alternative investment firm based in New York.

The firm, currently manages approximately US$1 billion, “focuses on distressed, event-driven and special situations in international markets, and has successfully invested in over 40 countries on six continents,” according to the Web site. The proposed takeover is being piloted by Black Sand Acquisition Inc, a St Lucia-based company that is chaired by William McConnell, who retired as the managing director of Lascelles on June 30. At US$333 million, the proposed offer values the ordinary shares of Lascelles at US$3.86 per share, which was a 9.4 per cent premium from the trading price in Jamaica of the shares on July 28. The proposed offer is less than half of the US$676 million that CL Financial paid for Lascelles in 2008. The offer is also less than the US$342 million that remains outstanding on the notes that CL Financial issued in 2008 to finance the acquisition of Lascelles. In explaining the rationale for the takeover bid, Black Sand Acquisition noted that CL Financial had defaulted on the US$342 million in notes, which are secured by a pledge of CL’s shares in the Lascelles.

According to Black Sand Acquisition: “Given the continued uncertainty of repayment of all of CL’s creditors, including the CL Spirits note holders, as well as recent corporate actions taken by the CL-controlled Board of Directors of the Company, it is our belief that the future of the Company is now in serious jeopardy and with it, the financial well-being of all of the Company’s shareholders and, by extension, the CL Spirits noteholders.” Some 87 per cent of the Lascelles ordinary shares are owned by CL Financial, which is itself controlled by the Government of Trinidad and Tobago by virtue of a June 2009 Shareholders’ Agreement between the Government and former CL Financial chairman Lawrence Duprey. The takeover offer was formally launched on July 29 and, unless extended, will close on September 19.


Source:
Trinidad Guardian
Monday August 1, 2011

http://www.guardian.co.tt/business/2011/08/01/lascelles-decide-offer-friday