Douglas Orane

The Shipping Association of Jamaica (SAJ) on Friday made a formal offer to Grace, Kennedy and Company for its 44 per cent stake in Kingston Wharves, an offer which, if accepted, would take the SAJ's shareholding in the porting company to well over 50 per cent, forcing it to bid for all the remaining shares.

With an estimated 15 per cent of the shares in Kingston Wharves, the SAJ is one of its largest single shareholders. Grace, Kennedy is the largest shareholder.

Grantley Stephenson

Though an integral part of a five-member consortium that had sought to wrestle boardroom control of Kingston Wharves from Grace, the SAJ on Friday emerged as the sole institution to make the formal bid for Grace's shares.

The other members of the consortium are:

Harry Maragh

* Jamaica Fruit and Shipping, run by Charlie Johnston;

* Transocean Shipping, operated by Roger Hinds;

Brian Wynter

* Maritime and Transport Services Limited, operated by Hylton Clarke; and

* Lanaman and Morris Shipping of which Harry Maragh is managing director.

Sources say that the members of the consortium, who, along with the SAJ, now control just under 50 per cent of the Kingston Wharves shares, would all maintain their shareholding in the port company.

Essentially therefore, the SAJ -- if it buys the Grace stake -- would be making a bid for the remaining six to seven per cent of the outstanding minority shares.

Yesterday, Grace's executive chairman, Douglas Orane could not be reached for comments on the latest development, and the finance director, Don Wehby declined comments.

Neither Harry Maragh, the current president of the SAJ nor Grantley Stephenson, the immediate past president -- both of who have been closely involved in the negotiations -- could be reached to provide details on the offer.

While our sources who are very close to the deal declined to name the precise offer price, they did say it was below the current market price of $1.65 per share, but above the $1.30 where the price hovered when the consortium was created a year ago to bid for control of Kingston Wharves.

When contacted for comments, Brian Wynter, the executive director of Financial Services Commission (FSC), told the Business Observer that he was unaware that the formal offer had been made, and that he had been in discussions with both Grace, Kennedy and the consortium members to sort out details surrounding the take-over bids.

Wynter stressed however, that in the event that a deal was struck, an offer would have to be made to the other shareholders.

"I am not aware of the bid," said Wynter. "When a person acquires shares in a listed company which gives him control, he is obliged to make an offer under the same terms to the other shareholders."

Prior to Friday's development, the FSC had ordered both Grace, and the consortium to make a joint bid to the other six to seven per cent shareholders for their shares.

The FSC had made the order after Grace and the consortium members arrived at a compromise agreement for the allocation of board seats at Kingston Wharves. Under this arrangement, five nominees from Grace and six from the consortium were elected to the board.

The FSC apparently interpreted this move as both groups -- which had been locked in a power struggle for a year and a half -- acting in concert to gain control of Kingston Wharves.

Up to press time last night, the Business Observer was yet to ascertain how the SAJ would pay Grace the estimated $600-$700 million that it cost to acquire the shares.

One source said that the proposal to Grace was for the shares to be paid for over time rather than as an up-front cash payment.

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