Susan Gordon, Business Reporter
Market excitement was unabated over Angostura's US$921 million ($65.7 billion) bid for a stake in Lascelles, rocketing the conglomerate stock to $546.24 Wednesday, and coming within a hair's breath of triggering the circuit breaker.
Investors went hunting for the blue-chip stock after a two-day suspension by the Jamaica Stock Exchange, which is probing the bid to verify whether it constitutes a takeover offer.
But few were willing to sell and at the end of the day, only 8,275 units traded, with asking prices ranging as high as $575 Wednesday. The cheapest sale was $545.
The stock at the close of market recorded capital gains of $71.24 or 14.998 per cent.
The closing price pushed Lascelles stock-market value closer to the bid price, rounding off at $52.4 billion Wednesday.
Almost as an anti-climax Thursday, the stock gained a single cent to close at $546.25 on 2,997 units, but traded as high as $550 during the session.
The offer price from Angostura is US$10.65 per share, US$4.50 to be paid in January assuming Lascelles shareholders accept the deal, with the rest payable by 2011. The full offer price converts to J$760, or more than $213 above market value as of Wednesday.
The JSE's circuit breaker rule, which mandates a 15 minute break in trading of a stock that gains or loses 15 per cent of its value in the session, has been in effect since June 1996.
The pause was implemented to allow for market reflection.
If the stock continues to lose or gain value, reaching 5 per cent or more when trading resumes, then activity is suspended for the rest of the day.
Angostura, under the deal struck with Lascelles, has agreed not to go after the 50.76 per cent voting rights held by principals William McConnell and George Ashenheim, whose holdings are largely in preference stock.
The offer was scheduled to open today and close January 12.
Up to press time, the Financial Gleaner was unable to reach Group Managing Director of Lascelles, William McConnell on the board's official recommendation to shareholders amid mounting speculation about whether Lascelles would satisfy the rules for listing if Angostura gets full take up on its bid for 86.4 million ordinary shares of the 96 million listed.
The JSE rules stipulate that a listing must have "a minimum of 100 shareholders holding in their own right not less 20 per cent of the issued ordinary capital (such percentage being not less than $50,000 nominal value) excluding the holding of one or more controlling share."
Angostura executive director Michael Carballo told the Financial Gleaner that the intent was to retain Lascelles as a listed company, but local analysts say the market would need more than just an assurance.
"There's not enough information," said Research Manager of Barita Investments, Nigel Goffe.
Other brokers and analysts were unwilling to go on the record, saying they would await the offer circular.
Commenting on the prospects for the stock within the six-week offer period, Goffe said: "It can go either direction."
The bid by Angostura comes seven months behind Carreras disposal of its 740,000 shareholdings in the conglomerate for $176 million.
At the bid, price those holdings would have been worth than $562 million, but Carreras managing director Michael Bernard said he had 'no regrets'.
"The decision we took was consistent with the aim of divesting ourselves of anything except tobacco assets," he said Thursday.
"We took a business decision not to hold the shares for speculative purposes," he added pointing out that if it were a deal in the making a year or more, Lascelles would have acted in accordance with corporate governance rules by not alerting Carerras.
McConnell is a member of the Carreras board, and Lascelles is the second largest shareholder in Carreras Limited, with 74.26 million shares.
susan.gordon@gleanerjm.com
