Berger directors failed to accept Ansa offer

Berger Paints annual report had some good news for investors to digest.

Berger Paints Jamaica (BRG) directors, used a number of unsupported information in highly recommending acceptance by minority shareholder of an offer by ANSA Coatings International to acquire their holdings last year.
The minority shareholders rightly ignored the directors recommendations in rebuffing the offer of $10.88 per share with just over 6 million units out of 105 million were surrendered. The stock now trades at $19 back to the level it traded at before the offer was made.
The directors’ circular apart from highly recommending acceptance of the offer, based on what they must have considered to be a fair price following PriceWaterhouseCoopers Tax and Advisory Services

” fair value assessment of the price among other factors. The recommendation went on to say that directors Michael Fennell, Warren McDonald and Milton Samuda along with employees Huron Gordon, Gladys Miller and Jacqueline Warren-Wilson intend to accept the offer. No intention was telegraphed by director Pokar Chandiram who subsequently passed on.
After the closing of the offer, a notice posted on the Jamaica stock Exchange website on October 26, 2017, reported that “Berger Paints Jamaica has advised that a Director and a Senior Manager sold a total of 437,895 BRG shares in response to the take-over bid offer by ANSA Coatings International, during the period the Offer was open and at the Offer price.”

Andy Mahadeo, the Managing Director

The amounts mentioned above represent shares held by McDonald and Miller. The annual report for December 2017 was revealing, as it still had all directors’ shares listed in their own names or that of their connected parties. Only Gladys Miller is shown as having disposed of her shares.
In their opinion they said,” in your directors view, it is highly likely that acceptance of the offer will take the aggregate holdings of ACI beyond 80 percent, in fact the Offeror had made it clear of its intention to delist the Berger shares if it acquires 29% or more of the shares.” “It is therefore clear that Berger Jamaica shares will in all probability be delisted from the JSE.” The directors offer no information from coming to such a conclusion.
The latest information, clearly does not sit well with the strong recommendations made to shareholders to accept the offer. IC was advised that the registrar never received the acceptance documents within the time frame required to accept the offer and the matter only surfaced when enquiries were made about nonpayment for the shares. Some directors are adamant that they accepted the offer by submitting the acceptance form. IC has been unable to determine where those applications went, suffice to say that they never got to the right place to effect acceptance. Up to Monday this week the shares were not transferred and were still in the names of the directors. With the offer having been closed those shares can no longer be a part of the offer and any disposal would have to be on different terms than that offered in 2017 with the stock now trading at $19. At any rate the notice from Berger to the exchange only mentioned one director with no mention of the others. This matter along with the poor judgement in advising shareholders about acceptance again raises questions as to the suitability of the directors to protect the interest of minorities.

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