Cerebos advances takeover offer for Comvita

Cerebos New Zealand has accelerated its all cash takeover offer for honey products company Comvita with documents mailed to shareholders today.

Cerebos is offering $2.50-a-share for Comvita – a bid which has been rejected by the Bay of Plenty company’s independent directors as “considerably” below value.

Comvita chairman Neil Craig has issued a “don’t sell” request to shareholders, urging them to wait until an independent report on the offer is released, expected within the next fortnight.

Cerebos is a subsidiary of Singapore-listed Cerebos Pacific, in turn 83% owned by Japanese Liquor company Suntory.

It advised the market of its $71.6 million takeover bid on October 14, when Comvita’s shares had last traded at $1.75 each.

The shares have since risen to above $2.70 each following Mr Craig’s comments.

Cerebos Gregg’s chief executive of coffee and foods, George Crocker, said the takeover offer had been mailed to shareholders today to comply with timing requirements of the takeovers code.

The offer will be open for 45 days, unless extended, and is conditional on receiving acceptances of at least 90% of voting rights and OIO approval.

“Our offer of $2.50 a share was reached taking into account all the information available to us at the time, including a three week period of exclusive due diligence and the information disclosed in Comvita’s profit upgrade announcement,” Mr Crocker said.

“We are now looking forward to receiving the independent appraisal report.”

On September 14 Comvita said it expected annual profit this financial year of between $7.3 million and $8.2 million, up from last year’s $3.6 million, with sales likely to be between $91 million and $95 million.

Mr Craig described Cerebos’ takeover offer as “unwelcome, opportunistic” and considerably under value based on Comvita’s forward earnings outlook.

Mr Crocker hit back today saying that Comvita had a history of falling short of mid-year profit guidance.

Auckland firm Grant Samuel is preparing the independent report.