IEC Energy Company Limited has launched its takeover bid of Ciboney Group Limited (CBNY) where it’s proposing $0.05 per share for the remaining shares in the company.

The circular, which was published on the Jamaica Stock Exchange (JSE) on Friday, noted that IEC Energy purchased 393,732,417 ordinary shares or 72.1122 per cent CBNY from the Finsac (Financial Sector Adjustment Company) on June 29 for $0.05 per share or $19.69 million. The offer, which opened on Friday and is set to close by October 6, will see IEC offer to purchase the remaining 152,267,583 ordinary shares of Ciboney valued at $7.61 million.

Due to the change in control, IEC Energy was required to make the offer to the remaining shareholders of Ciboney Group. However, IEC Energy clearly outlined that it does not intend to take Ciboney private and will take the necessary steps to ensure that it doesn’t own more than 80 per cent of Ciboney nor have less than 100 voting shareholders. IEC Energy’s board is composed of Nigel Davy and Wayne Wray.

“Having acquired a majority interest and after this mandatory offer process is completed, the offeror anticipates that CBNY will remain dormant until the board of directors makes further decisions; however, it is not the intention of the offeror to remain dormant permanently. It is anticipated that the board will first ensure that the company is compliant with all obligations as a publicly listed entity, thereafter, determine the capitalisation and appropriate mechanism required to make the business operational based on their strategic planning,” the document noted.

Some of the options which were listed included operationalising the company by raising capital and developing business lines in synergy with the IEC group of companies; merge Ciboney into an existing company within the IEC group of companies, or raise capital so that Ciboney acquires an existing company with the IEC group of companies; the board could pursue other strategies and synergies based on market conditions, their knowledge and experience and the activities of the IEC group of companies at the time.

The name of the company would also be changed from Ciboney to another name based on the plans by the board of directors. Ciboney was listed on the JSE in January 1993 where it was involved in tourism investments including hotels and villas. However, the business fell under the purview of Finsac during the 1990’s financial crisis with the Government intervention company attempting to dispose of its interest since then.

IEC Energy Company was owned by Wiltshire Consulting and Advisory Group Limited before it was transferred to St Lucian-based Innovative Energy Company Limited (IECL) on June 30. IECL also has a Jamaican subsidiary called Innovative Energy Company Limited DBA IEC SPEI Limited. IECL is owned by Nigel and Jennifer Davy with Nigel being appointed the new chairman of Ciboney in June.

IECL has allocated $3 million to the purchase of shares from existing Ciboney shareholders which is currently being held at First Global Bank Limited. This is the second takeover bid to happen in the last year on the JSE following the acquisition of MFS Capital Partners Limited (formerly SSL Venture Capital Limited) by MFS Acquisition Limited. That offer had Barita Investments Limited as the broker and Aspiresec Limited as the company secretary.

Ciboney traded up to $1.12 on Monday following the takeover bid’s publication with the stock halting up at one point in the day. The 635,598 shares were traded valued at $713,532.89 over 39 trades.

Ciboney is up 100 per cent year to date which leaves it with a market capitalisation of $611.52 million. Former Ciboney director Whyclife Dave Cameron purchased 40,534 shares of Ciboney on July 7 at $1.49 per share. Winston Watson was appointed as an independent non-executive director on September 4.

Ciboney’s 2023 audited financial statements revealed it had only $63,142 in cash at the end of May and a shareholder deficit of $10.62 million. Ciboney’s first quarter report is due by October 15. It is not mandatory that existing Ciboney shareholders have to accept the offer.