Musson Group launches takeover bid for Seprod
Investments Limited, a subsidiary of Musson (Jamaica) Limited, has launched a takeover bid to acquire an additional two per cent interest in Seprod Limited. The bid was launched as per takeover rules after Musson Investment and its associates’ stake in Seprod reached 50 per cent. The deal to buy the additional two per cent of Seprod will cost $1.09 billion.
The announcement, which was posted following the close of Friday’s trading, highlighted that the Musson Group and its associates now collectively own half of all the ordinary shares in Seprod. As a result, it must now make an offer under the Jamaica Stock Exchange (JSE) rules and the Securities Act to the remaining Seprod shareholders. This will see its wholly owned subsidiary Musson Investments seek to purchase 13,948,000 shares in Seprod at J$78 per share or an extra 1.90145 per cent of the company.
The planned move to acquire a 50 per cent interest in Seprod Limited occurs five years following Facey Group Limited’s offer for sale where it sold 91,914,894 Seprod shares to the public. At the time, one of the reasons listed for the offer was to limit Facey Group and its affiliates from owning more than 50 per cent interest and resulting in a change of control.
However, this all changed on January 5 when Musson (Jamaica) purchased 1,630 shares at J$78 to take the collective interest to 50 per cent. The disclosure on the transaction was posted to the JSE on January 18, nearly two weeks after the event.
The associates to the Musson Group include Facey Group Limited, Seprod’s third-largest shareholder, Stony Hill Capital Limited and Perseverance Limited. Musson Group chairman, CEO and principal shareholder PB Scott has a beneficial interest in all five mentioned firms while his sister and vice-chairman of the Musson Group Melanie Subratie has a beneficial interest in all the mentioned firms except for Perseverance.
Seprod shareholders had approved an increase in Seprod’s authorised share capital to one billion ordinary shares at its September 27 annual general meeting (AGM) up from the previous allotment of 780 million. Of that amount, 733,546,855 of the Seprod shares are already issued. The directors of the company were also empowered to allot new shares of the company as they deem fit and have the power to list the shares on the JSE. Thus, the proposed acquisition of new shares occurs shortly after this AGM approval.
Musson Investments does not intend to acquire more than 13.95 million ordinary shares. Thus, the Musson Group and its affiliates would not own more than 380,721,661 shares relative to the current 366,773,661 shares currently owned by five companies.
The offer will open on January 24 and close on February 15 with each shareholder planning to sell their shares to Musson Investments having to bear the costs of each transaction. An independent committee of Seprod’s board will review the offer and propose a recommendation to shareholders in a director’s circular. The whole offer will be processed through JMMB Moneyline and its
moneylineipo.jmmb.com platform for non-JMMB clients.
Seprod’s share price traded up to $84.12 on Friday which leaves it up 5.56 per cent year-to-date with a market capitalisation of $61.71 billion.
The Musson Group has been very active in recent months through its various subsidiaries. Musson Investments sold 8,348,055 shares of Eppley Caribbean Property Fund Limited SCC – Value Fund (CPFV) on July 4 to General Accident Insurance Company Jamaica Limited (GENAC) in a transaction valued at $358.88 million.