Lascelles deMercado Chairman George Ashenheim (left) and Managing Director William 'Billy' McConnell. - File
George Ashenheim and William 'Billy' McConnell, who control the major voting stakes in Lascelles deMercado, were guaranteed US$10 million in compensation from Angostura Limited, if the Trinidadian firm varied the terms under which it planned to bid for what it said was a 49.24 per cent stake in the Jamaican conglomerate.
The compensation would be paid if:
Angostura failed to launch its formal bid by December 7;
The terms in the bid circular were not what was agreed with Ashenheim and McConnell;
Angostura launched the bid, but failed to take up the shares offered or not pay the cash portion of the bid price within 14 days of the close of the bid; or
The bid was not closed at the stated time, without the consent of Ashenheim and McConnell.
But it was not immediately clear yesterday whether the agreement still stands or has lapsed with the Jamaica Stock Exchange having put the brakes on the proposed transaction, arguing in effect, Angostura had launched a takeover bid for Lascelles.
The upshot of the JSE's ruling on Tuesday is that is that Angostura, if it revives its bid, will have to go after all of Lascelles' shares, including those held by Ashenheim and McConnell, offering same terms to all stockholders.
When Lascelles a fortnight ago formally announced that it had received notice of a bid from Angostura, McConnell, the Lascelles CEO, said that equities in the company controlled by himself and his chairman, George Ashenheim would be excluded from the offer.
The two men control over 54,000 preference and 9.5 million ordinary shares, which combined give them over 46 per cent of the voting rights and effective control of the company.
The bulk of those shares are held in a Cayman Island-registered vehicle called Calla Lilly.
It emerged, based on the draft bid document, that that there is an agreement for Ashenheim and McConnell to transfers Calla Lilly to Angostura for J$2, once Angostura met the proposed terms of its bid.
But with Angostura offering US$10.65 per share for the 86.5 million shares it says it wants to buy, the ordinary shares held by Calla Lilly would be worth more than US$100 million.
The document does not indicate if there was any other consideration or payment, apart from the J$2 for the transfer of Calla Lilly to Angostura.
Another agreement, however, covered the provision of the US$10 million compensation to Ashenheim and McConnell, if Angostura did not hold up its bargain.
"This agreement is based on the premise that the structure of the transaction is such that Calla Lilly will be making a sacrifice in order to induce the offeror to make the offer to the other Lascelles shareholders at the bid price and on the terms agreed," said the draft bid document.
"Thus, in order to induce Calla Lilly to make such sacrifice the offeror has agreed to pay Calla Lilly a break-fee of US$10 million if any of the following events ... shall occur."
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