A fair offer
SSLVC board dubs MFS takeover offer as fair
ACCORDING to a directors’ circular obtained by the Jamaica Observer, the board of SSL Venture Capital Jamaica Limited (SSLVC) has unanimously agreed that the takeover bid offered by Micro-financing Solutions Limited (MFS) is fair.
The SSLVC board outlined that after careful review and consideration of all relevant aspects of the offer, the offer price of $0.0948 per share is fair from a financial point of view.
The SSLVC board qualified its decision by highlighting: the lack of operating portfolio companies and operating income; the withdrawal of operating financial support by Stocks and Securities Limited (the majority shareholder) as at March 31, 2022; the financial position of the company including the valuation of $1,155,437 for the fixed assets; the prior indications of the board that a solution would be required to the financial challenges faced by the company; the offeror intends to take over the operations of the company which provides an opportunity for fresh direction and insight; and there is strategic alignment in the desire for the owner of the majority shareholding to divest the company.
With that said, a letter from “the broker” VM Wealth Management Limited dated April 22, 2022 confirm that “Micro-financing Solution has deposited funds in the amount of $31,171,134.90 to our VM Wealth Management Limited Bank account…these funds that are now in our account are being held to finance the takeover bid for shares in SSL Venture Capital Limited”.
In a bid to satisfy company laws which stipulates that a takeover bid must offer to acquire all the shares in a company. MFS advised that it intends to purchase 100 per cent of SSLVC.
However, in order to keep SSLVC listed on the Jamaica
Stock Exchange, MFS will only keep 316,329,891 shares which is equivalent to a 79.08 per cent stake in SSLVC.
MFS explained that if acceptances exceed more than 79.08 per cent of the share capital, it will immediately sell off enough shares to enough persons to ensure that there will be more than 100 shareholders holding not less than 20 per cent of the outstanding shares. In doing so, SSLVC will remain listed and MFS has no intention to purchase additional shares in the company sufficient to take its holdings in the company over 80 per cent.
The directors’ circular outlines that so far, Stocks and Securities Limited (SSL), which is the majority shareholder (79.08 per cent) in SSLVC, has accepted the offer.
At the same time, Director John Jackson. who indirectly owns 251,000 shares through Bridgeton Management Services Limited, has indicated it will not be accepting the offer.
Bridgeton also indicated that it has no other arrangements with MFS, and that the offer is in accordance with its strategy to divest the entity.
This latest offer which was made on May 9, 2022 opened at 10:00 am on May 11, 2022 and is scheduled to close at 3:00 pm on May 25, 2022.
On August 8, 2018, C2W Music Limited’s name was legally changed to SSL Venture Capital Jamaica Limited (SSLVC). This was done through a block transfer of 215,978,588 shares to SSL Ventures from C2W Music Limited, which allowed SSL Ventures owning 80 per cent of C2W Music Limited.
Consequent to the transfer of ownership, the existing team and directors of C2W Music Limited retired, allowing Stocks and Securities Limited to utilise its own management team and board of directors. The vision of the new board of directors was to move away from the current business model and pursue a venture capital driven business model.
SSLVC main purpose as the name suggests ‘Venture Capital’ is to take up equity stakes in promising Jamaican start-ups and small to medium enterprises (SMES) with the aim of SSLVC realising investments within a three-five-year horizon. This was achieved through a capital injection of US$850,000.00 from Stock and Securities Limited which was used to complete SSLVC’S initial equity investment in three young companies. On July 2, 2018 and July 20, 2018 SSL Ventures acquired majority shareholding in Bar Central Limited and Muse 360 Integrated Limited.