The battle for Banks became much more intense last week than it had been before the beginning of December. The two competitors, AmBev and ANSA McAl, are now battling for the final one-third of the company which, surprisingly, was still in other shareholders’ hands up to last Thursday.
However, all that may be changing as shareholders seemed much more willing to sell at $7 per share. Nearly half a million were traded on Tuesday, December 1, at $7.00, and just over six million on Wednesday, December 2 at $7.10. Then on Thursday, another 621 000 shares in Banks Holdings Limited. traded on the Barbados Stock Exchange at $7.10 each, bringing the total since the takeover bid began in late September to 9.5 million. (This does not include any trades made on Friday.)
Earlier in the week AmBev, a subsidiary of the world’s largest brewing company Anheuser Busch InterBev, announced it had increased its offer to $7.10, for the first time passing ANSA McAl’s offer of $7.000, which it had announced on November 19.
Not to be outdone, ANSA McAL (Barbados) Limited on Thursday announced that it had increased its offer to $7.20 per share.
The price now on offer is therefore close to three times what Banks was trading at in early September before the takeover bid began, when BHL shares were trading at $2.49.
A check by into the trading of BHL shares since the takeover bid was triggered by AmBev’s purchase of Massy Holdings 20 per cent stake on September 22 shows that the war for BHL did not heat up on the trading floor of the Barbados Stock Exchange until the $7 threshold was reached, and even then not really until this week.
This may sound hard to believe, given the amount of news coverage generated by the original offer by AmBev for all of the remaining shares in BHL which it did not control, and ANSA’s subsequent entry into the bidding war in mid-October.
AmBev had purchased SLU Beverages in August, giving it a 20 per cent stake in BHL, so when it got Massy’s 20 per cent the Barbados takeover code was triggered. AmBev’s offer for the other 60 per cent of the shares was therefore made from a fairly commanding position, as it needed only another 11 per cent to control the company.
But in mid-October ANSA McAL made a dramatic move of its own with the purchase of the Trinidad and Tobago firm BWPL Holdings, which owned almost 8.5 million shares in BHL, or about 13 per cent, and launching an alternative takeover bid of its own.
However, despite newspaper ads during October by both companies promoting their offers, only 12 400 other BHL shares changed hands that month. That paltry total was even lower than the 62 000 shares in BHL which had traded at lower prices shortly after AmBev’s announcement.
No BHL shares traded in the first week of November either, and then the high court of Barbados stepped in and froze trading, lifting its suspension a week later on November 13. By the end of the month another 2.3 million BHL shares had changed hands, nearly half a million at $6 and just over 1.8 million at $7.
But last week, it seemed, the battle for BHL suddenly became a hot war.
So despite the fact that a bidding war for BHL has been under way since mid-October, only 9.5 million, or around 15 per cent, of the company’s shares had been traded on the regular market up to last Thursday, December 3, and over two-thirds of those trades took place last week.
As a result, up to Thursday, December 3, there were still about 32 per cent of the total shares in BHL – that is, roughly one-third of BHL’s almost 65 million shares – not yet under the control of either AmBev or ANSA McAL.
Patrick Hoyos is a journalist and publisher specialising in business. Email pathoyos@gmail.com