Banks DIH repurchases 15% of shares from Barbados company

Banks DIH Limited (BDIH) yesterday announced that on December 1st this year it repurchased 150.1m common shares held in its issued share capital by Banks Holdings Limited (BHL) of Barbados at a price of G$36.79 or a total of around G$5.52b.

In an advertisement in yesterday’s Stabroek News, BDIH pointed out that it had notified shareholders by letter dated February 25th, 2005 of a Memorandum of Understanding (MoU) between BDIH and BHL designed to expand and enhance their businesses in the Caribbean Community and beyond.

A fundamental term of those arrangements under the MoU was that each company would hold shares in the issued capital of each other. The advertisement said that the continuation of the mutual shareholding depended on continued cooperation arrangements between BDIH and BHL.

The advertisement pointed out that BDIH informed shareholders in December 2015 that it had sold the shares which it held in BHL’s issued capital – a total of 4,358,815 common shares or around 6.7%. BDIH said that this was in the context of the takeover of BHL in Barbados by Brazilian company AMBEV. The advertisement said that at that date BHL held around 20% of the issued capital for BDIH.

Noting that the cooperation agreements between BDIH and BHL came to an end in December, 2015, the advertisement said that the directors of BDIH have been advised that the situation whereby each company hold shares in the issued capital of each other should no longer continue.

As a result, on December 1st, 2016 BDIH repurchased 15% of the shares held in BHL’s issued capital at G$36.79. The advertisement said that the price was based on a valuation done by PricewaterhouseCoopers in December 2015 which valued the 20% shareholding of BHL in the issued capital of BDIH between G$37 to G$40 per share.

“The Directors of BDIH believe that the transaction was in the best interests of all the stakeholders of BDIH. Throughout the whole process the directors of BDIH were guided by the company’s financial and legal advisors”, the advertisement said.

The 2005 deal between BDIH and BHL which had shared a historic relationship was seen as a bid to stave off an attempted takeover of BDIH by ANSA McAl of Trinidad and Tobago. Ironically, ANSA McAl again featured in the 2015 bid to take over BHL. BDIH’s decision to sell its shares to a subsidiary of AMBEV helped to defeat ANSA’s bid for BHL.

In December 2015, BDIH sold its shares in BHL to SLU Beverages, a subsidiary of AMBEV, for B$7.10 per share, which was ten cents over what Trinidadian conglomerate ANSA McAL was offering.

In a release in December, 2015, BDIH noted that in keeping with the clauses in the Memorandum of Understanding between it and BHL, executed on February 15, 2005, prior to selling its shares in the company to SLU Beverages it had offered the first option to buy to BHL itself.

However, Banks noted that the Board of Directors of BHL determined that it was not interested in repurchasing the shares and had no objections to Banks selling its shares to SLU Beverages Ltd.