Mayberry would rather have roses and chocolates. Unsolicited suitors unwelcome:
MAYBERRY INVESTMENTS says it is prepared to buy back chunks of Mayberry Jamaica Equity Limited, MJEL, in the future, were the price of the stock fall by double-digit levels.
It assumes a successful initial public offering for Mayberry Jamaica Equity Limited, MJEL, which opens next week at a price of $7.56 per share.
“That’s not to say that if it falls to 10.1 per cent we will buy, but definitely the question was asked if it falls 50 per cent then we will buy,” said CEO Gary Peart in response to queries at the investors briefing on the upcoming IPO on Wednesday.
Mayberry Executive Chairman Chris Berry later added that despite the willingness to buy if the stock falls to certain levels, the company would equally sell down its position in order to finance future deals.
“The opportunities that are coming to us are getting bigger and bigger, and faster and faster. So what is more likely to happen is that over time, Mayberry will end up owning less of MJE than it owns now as a means of bringing in more equity. Because we are not going to be borrowing more,” said Berry.
MJEL is a vehicle for various Mayberry investments. The offer for shares has been structured in such a way as to dissuade future efforts of a hostile takeover of MJEL. The company will issue a special share to Mayberry. The share will be held by another affiliated entity called Mayberry Asset Management Limited, which is owned and controlled by Christopher Berry and Mark Berry.
The share allows a veto vote against unsolicited takeover bids.
However, Peart said the provision does not signal any fear of a hostile takeover of MJEL, but is really standard practice, often done through various means.
“The special share is therefore designed to ensure that even if a majority of the company’s ordinary shares are acquired by third parties, the investment management agreement under which Mayberry Asset Management Limited is contracted to provide investment management services, cannot be voluntarily terminated by the company, except upon the occurrence of specified termination events,” according the IPO prospectus.
Under the IPO, Mayberry Investments will end up with around 80 per cent ownership of MJEL; 10 per cent will be owned by Mayberry shareholders and 10 per cent by the public.
Peart said MJEL has been priced at a discount for IPO.
“We set that price at about 25 per cent discount to the net asset value at June 30,” he said.
As at May 2018, the company’s portfolio of securities had a market value of $11 billion, according to the prospectus – which equates to $9.16 per share.
The IPO, which is valued at $908 million, will open for subscription from July 9 to 30.
The company’s total assets as at December 2017 were booked at US$77.4 million and after accounting for liabilities, the shareholders equity equated to US$71 million or about $9.2 billion.