Sep 2007 Financial News

BS&T shareholders advised not to accept N&M offer now

Sep 19, 2007

SHAREHOLDERS of the Barbados Shipping and Trading Company Limited (BS&T) are being advised not to accept the Neal and Massy offer at this stage.

This is the message the BS&T Board of Directors issued to shareholders in respect of the offer.

Neal and Massy has tendered an offer of $8.50 a share in addition to a combination of one ordinary share in Neal & Massy for every 2.75 ordinary shares in BS&T, plus $1.80 cash for each BS&T share.

ANSA McAL is offering $8 a share.

The Directors said that if the BS&T is to be acquired, then the offer by Neal and Massy Holdings Limited is considered the better choice as a corporate owner of BS&T.

At the same time however the BS&T Board of Directors is telling shareholders they should hold back on accepting the Neal and Massy's cash offer of $8.50. In addition, the Board said it was unable to make a recommendation with regard to the combination offer which Neal and Massy has also tendered.

"With respect to the cash offer, the Board is of the view that there is rarely an absolute and single value for a company as the perception of value will always vary from buyer to buyer depending on the strategic and synergistic value of the company to the specific bidder," the Directors said in their circular issued yesterday.

"Therefore it is the Board's view that the $8.50 cash price may not necessarily be the highest price that shareholders might ultimately be offered via the current bidding process," the Directors said.

As to the combination offer, the Directors said they are unable to make a recommendation since the offer is dependent on several factors.

According to the Directors, "should Neal and Massy be the successful bidder, it may not ultimately achieve a 100 per cent take-up, and while some shareholders may choose the combination consideration, many others may select the cash offer."

In this scenario, the BS&T officials further stated, Neal and Massy would benefit from the benefits to be achieved from the combined businesses to the extent of the percentage of BS&T shares acquired, but it will have also increased its debt to meet the cash offer obligation.

Saying Board members were not aware of the amount or the terms of the debt that may be assumed to fund the purchase, the officials said: "Hence the initial combined value of the two companies would likely be different to what it would have been in the case of a pure merger."

They added that if shareholders wish to consider the combination consideration "then your Directors recommend that unless you are comfortable in evaluating the above factors in relation to your individual circumstances, that you seek professional financial advice."(JB)

Source:
The Barbados Advocate
Wednesday 19, September, 2007

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