Eppley Fund Managers Limited (EFML) has launched a tender offer to acquire between 20 per cent and 60 per cent of Eppley Caribbean Property Fund Limited SCC — Development Fund (CPFD) at Barbadian dollars (BDS) 0.21 ($15.96) per share.
This represents a 24 per cent premium to the last traded price of BDS$0.17 and a 34 per cent premium to the average share price of CPFD over the last 12 months on the Barbados Stock Exchange (BSE). With 54,349,890 cellular shares, this means EFML will purchase between 10,869,978 shares and 32,609,934 shares valued between BDS$2.28 million ($173.48 million) and BDS$6.85 million ($520.45 million). The takeover bid circular and form of acceptance can now be accessed with the offer set to close at 3:00 pm (Barbados time) on March 27.
"Eppley's offer to purchase a large volume of Development Fund shares at a significant premium will provide the market with liquidity and unlock significant value for our shareholders," said Eppley General Manager Justin Nam in the published disclosure.
A directors circular has been issued by the board of directors for the consideration and benefit of CPFD shareholders. A special committee comprised of solely independent directors including Roger Cave, Richard A. Luck, Damian Duncan and Jeffrey Hall gave no recommendation to accept or reject the offer. This was related to CPFD's 51 per cent share price discount to the net asset value (NAV) and unknown future of the stock due to the reduced float following the offer.
The Development Fund has total assets of BDS$18.94 million ($1.43 billion) spread across nine properties in Barbados, St Lucia, and St Vincent and the Grenadines. The fund's net asset value (NAV) decreased from BDS$0.35 to BDS$0.34 with shareholders' equity of BDS$18.61 million. It recorded a net loss of BDS$674,855 for its 2022 financial year. EFML does not intend to de-list the shares from the BSE irrespective of the outcome of the offer.
The top 10 of CPFD owns 40.59 per cent of CPFD or 22,065,276 cellular shares with Massy (Barbados) Limited as the largest shareholder. EFML owns 145,00 shares in CPFD with all directors affiliated with the offer expressing an interest to accept. These include Chairman Nicholas Scott, Paul B. Scott and Melanie Subratie who are collectively own 5,711,532 shares through connected parties. CPFD's last price was TTD$0.71 (BDS$0.21) while CPFV's last price was TTD$1.60 (BDS$0.48).
Eppley Limited had $904.37 million in cash at the end of September with a balance sheet of $5.52 billion in assets and $1.06 billion in shareholders equity. The acquisition of the shares would make CPFD an associate or subsidiary based on the number of shares acquired at the end of the offer. Its fourth-quarter unaudited financials are due by February 14.
Eppley launched the Barbadian-based Capital Infrastructure Group Limited in December with Jamaica Producers Group Limited in which it owns 50 per cent of the Class B Management Preference shares and 50 per cent of the common shares of Capital Infrastructure Managers Limited. Eppley intends to host a virtual investor presentation on February 2 at 6:30 pm.
EFML, a wholly-owned subsidiary of Eppley Limited, owns the 100 common shares of Eppley Caribbean Property Fund Limited SCC and is the fund manager of its two cellular funds which also includes the Value Fund (CPFV). CPFV and CPFD are both listed on the Trinidad and Tobago Stock Exchange (TTSE), but its audited notes on share capital states that trading has been suspended on that market. CPFV also trades on the BSE and Jamaica Stock Exchange (JSE). Its last NAV was BDS$0.76.
"The tender offer demonstrates Eppley's confidence in the underlying value of the Development Fund's assets. Finally, it highlights Eppley's commitment to use all of its resources to drive shareholder returns across all of its investment platforms," Nam closed.
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