Seprod Limited has launched a takeover bid for an additional 29.85 per cent stake in its Trinidadian subsidiary AS Bryden & Sons Holdings Limited (ASBH).

The bid, published in the Trinidad Guardian last Thursday, targets 447,491,012 ordinary shares of ASBH.

Under the takeover bid, Seprod will issue 396.43 new ordinary shares for every 1,000 shares of ASBH offered. Seprod expects that this move will result in it issuing up to 177,398,223 new ordinary shares to increase its equity position in ASBH from 50.14 per cent to 79.99 per cent. By stopping short of the 80 per cent threshold, ASBH is ensuring it meets Jamaica Stock Exchange (JSE) regulatory requirements, which require at least 100 shareholders to own 20 per cent of the company and no single shareholder to own more than 80 per cent.

“Seprod does control AS Bryden, but it now owns just over 50 per cent of its shares. We will be better able to integrate the consolidated operations, more efficiently use shared resources, and generally better unlock shareholder value if the offer is successful and Seprod owns the vast majority of AS Bryden’s shares,” Seprod and ASBH Chief Executive Officer Richard Pandohie explained in an e-mail response to a Jamaica Observer query.

Seprod first acquired a 60 per cent stake in ASBH in June 2022 for $7.11 billion through a mixture of debt and preference shares issued to the former owners. Seprod’s equity stake decreased to 54 per cent in November 2022 when ASBH acquired Micon Holdings Limited by issuing new ordinary shares of ASBH to the owners of Micon Holdings.

Seprod’s equity position further decreased to 50.63 per cent in December 2024 when ASBH issued new ordinary shares to Caribbean Producers (Jamaica) Limited (CPJ) founders Thomas “Tom” Tyler and Anthony Mark Hart’s holding companies Sportswear Producers Limited and Wave Trading Limited. That transaction increased ASBH’s direct equity stake in CPJ to 75.28 per cent. Hart joined Seprod’s board of directors on November 27, while Tyler was appointed as a director on January 16.

Due to Jamaican regulatory requirements, ASBH launched a takeover bid to acquire 4.71 per cent more of CPJ or 51,782,469 ordinary shares. It completed this move by issuing 10 new ordinary shares of ASBH for every 35.23 ordinary shares of CPJ surrendered. This transaction resulted in ASBH issuing 14,696,802 ordinary shares on February 24 and the increase of its issued ordinary shares count from 1,484,554,389 to 1,499,251,191.

There were 333 applications submitted with 76,827,914 shares of CPJ tendered, but the takeover bid was pro-rated, with investors receiving 67.401 per cent of the shares tendered.

With Seprod now moving to further build on its regionally integrated distribution platform, it intends to increase its interest in ASBH as it seeks to align both companies and extract greater synergies between both businesses.

Based on ASBH’s $28.75 closing price and the $84.25 closing price of Seprod last Wednesday, an ASBH investor would surrender $28,750 worth of value and receive $33,399.23 worth of SEP shares. ASBH’s Jamaican-dollar share price increased four per cent on Thursday to $30.17, with the stock halting up to $35.50 during trading. Seprod’s share price declined to $81.53 on Thursday.

Ernst & Young Services Limited (EY Jamaica) produced an independent valuation on the offer and determined an equity value of $30.76 to $34.00 using the income approach valuation methodology. This was prepared using the December 2024 information which resulted in an estimated equity value of TT$2.08 billion or $32.38 per share, an eight per cent premium over the $30.01 closing price at the end of December 2024.

According to the takeover bid circular, ASBH intends to apply to list its ordinary shares on the Trinidad and Tobago Stock Exchange (TTSE) if the bid is successful. ASBH listed its Jamaican dollar (JMD) shares on the JSE Main Market in November 2023 at $22.50 and listed its shares on the JSE US Market at US$0.22 per share. ASBH became a registered reporting issuer on September 13, 2024, with the Trinidad and Tobago Securities and Exchange Commission (TTSEC) ahead of proposed listing on the TTSE.

It was previously reported that ASBH should have listed on the TTSE by March 2025. When the Business Observer asked Pandohie the reason for the delay, he responded, “The AS Bryden management team has been focused on operating the core business and integrating recent acquisitions in Jamaica and Barbados. AS Bryden is now a reporting issuer in Trinidad and Tobago. AS Bryden expects to take the necessary steps to become listed on the TTSE this summer.”

Currently, Musson Investments Limited, a subsidiary of Musson Jamaica Limited, is the second largest shareholder in ASBH, while Musson Jamaica is the largest shareholder in Seprod. At the end of December 2024, the top 10 shareholders of ASBH collectively owned 1,349,003,296 shares or 89.98 per cent of the company. If Seprod’s stake is excluded, the other nine large shareholders own 597,343,280 shares or 39.84 per cent of the company.

Seprod doesn’t intend to surpass the 79.99 per cent target and would pro-rate the ASBH shares tendered by investors. Seprod currently has 733,546,855 ordinary shares in issue with a full take up in this offer expected to increase the issued ordinary share count to 910,945,078 ordinary shares. Thus, the Coconut Industry Board, Seprod’s second largest shareholder, would see its current equity stake reduced from 22.28 per cent to 17.94 per cent under the assumption that they don’t convert any ASBH ordinary shares in this takeover bid.

Although this offer has been launched in Trinidad, investors who own shares of ASBH on the JSE also can participate in the takeover bid.

Investors who don’t have a Jamaica Central Securities Depository account would receive share certificates for new Seprod shares. Republic Wealth Management Limited is the broker for the offer, with investors able to contact them at
invest@rfhl.com.

The takeover bid will be open between May 1 and June 5.

Seprod has grown considerably over the last decade due to its aggressive acquisition strategy combined with its own organic growth initiatives. Its consolidated revenue has grown from $14.77 billion in 2014 to $133.08 billion (US$850.83 million) at the end of 2024, while its net profit attributable to shareholders has also improved from $1.01 billion to $2.97 billion. Its asset base also grew from $14.06 billion to $131.70 billion, with its equity attributable to shareholders rising from $10.08 billion to $29.83 billion.

Pandohie announced at Seprod’s 2023 annual general meeting that he wanted Seprod’s consolidated revenue to surpass US$1 billion by 2026.

AS Bryden has been a central pillar of this growth target, which has been enacting different acquisitions. It acquired 55 per cent of Retail Acquisition Company Limited, parent company of Stansfeld Scott (Barbados) Limited for a consideration of TT$45.35 million ($1.05 billion), and acquired the remaining 10 per cent of Bryden pi Limited for TT$39.44 million. The three key acquisitions done in 2022 resulted in ASBH’s revenue improving 32 per cent to TT$3.39 billion ($78.21 billion), but higher taxes and finance costs resulted in the consolidated net profit decreasing 54 per cent to TT$63.85 million ($1.47 billion), with TT$53.73 million attributable to shareholders.

Despite that hurdle, AS Bryden commenced operations of AS Bryden & Sons Guyana Inc on January 6 as it continues to deepen its reach within the Guyanese market. That new Guyanese business is a distribution company focused on premium beverages like STR8 Vybz and Beringer wines and other third-party brands. Also, the company is working on developing its new warehouse in Trinidad, which should be completed by the first quarter of 2026.

Seprod declared a dividend of $0.605 totalling $443.80 million to be paid on June 6 to shareholders on record as of May 22. ASBH also declared a preference dividend of US$0.015 totalling US$456.045 to be paid on May 14 to shareholders on record as of May 12. The ASBH preference shares (ASBH6.00) traded for the first time last Thursday at US$1, with a little over 900,000 shares available at US$1.