McCashin’s pulls out of $1.7 million Veritas deal

AUCKLAND: McCashin’s Brewery will not take a cornerstone stake in food and beverage investor Veritas Investments and has backed out of an option to buy a near20% stake at a hefty premium.

In January, 660 Main Road Stoke — which trades as McCashin’s — obtained a call option to buy 8.6 million Veritas shares from Mad Butcher owner Michael Morton at 20c apiece. The options expired at the close of business on March 29, but notes to the stock exchange on Thursday show the option was terminated.

The $1.7 million purchase price would have been a premium to the current trading price of 13c, or $1.1 million.

However, Veritas shares are not widely traded.

The transaction included a nonrefundable deposit of $50,000.

Aucklandbased Veritas is focusing on its bars and hospitality offerings, having been hard hit over the past two years by disastrous forays into the Mad Butcher and Nosh grocery businesses. Veritas paid Mr Morton $40 million for the meat retailer in 2013 and sold the franchise back to him for just $8 million last year.

It had faced pressure from its former banker, ANZ, for repayment of $27 million in loans before resetting as a smaller, hospitalityfocused company.

In 2014 it acquired the Better Bar Company, which describes itself as the country’s leading Irish and gastro pub operator, with eight sites in Auckland.

Last month, Better Bar Co completed the $2.7 million purchase of the Citizen Park pub in Kingsland.

Last week, Veritas appointed Duncan Makeig as a new director to chair the board and said it plans to rebrand later this year as Good Spirits Hospitality.

Veritas also entered into sales agreements of its Doolan Brothers Newmarket and Doolan Brothers Lynfield sites to separate operators, and expects to generate $710,000 of cash before transaction costs, which it will plough back into growing the gastro pub portfolio.

Nelsonbased McCashin’s was at the forefront of New Zealand’s fledgling craft beer industry in the 1980s. Its Mac’s beer business was sold to Lion in 1999.

The family started afresh and now makes Stoke beer and Rochdale cider. Director Paul Le Gros was not immediately available for comment.