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Cerebos to let Comvita takeover offer lapse

Cerebos New Zealand says it will not increase its takeover offer for Bay of Plenty honey company Comvita.

Duncan Bridgeman
Tue, 06 Dec 2011

Shares in honey products company Comvita [CVT:NZX] could come under pressure today after Cerebos New Zealand said it will not increase its takeover offer.

Cerebos is offering $2.50-a-share for the Bay of Plenty-based Comvita, well short of the independent value range of $3.40 to $4-a-share.

Cerebos NZ, a division of food and coffee group Cerebos Pacific, had until the close of business tomorrow to extend its offer, which closes on December 22, but has decided to let the bid lapse.

In a brief statement this morning Cerebos Gregg’s chief executive George Crocker said the decision followed “careful consideration of all the factors investigated by Cerebos before the offer was launched,” as well as the Independent Adviser’s report.

“The Cerebos offer was priced on our understanding of the risks inherent in the operations of Comvita and the manuka honey industry and the risks and costs associated with achieving continued growth in Asia,” he said.

“In our view, these factors do not justify a price anywhere near the valuation range indicated by the Independent Adviser’s report.”

Comvita’s independent directors have recommended shareholders reject the Cerebos offer, describing it as significantly below fair value.

Comvita chairman Neil Craig has argued the independent advisor undervalued Comvita in its valuation.

With the takeover unlikely to succeed, investor focus will shift to Comvita’s trading performance and any plans Cerebos might have in the manuka honey market.

Comvita is forecasting full year sales of $91 million to $95 million in the current year to 31 March 2012 and normalised profit of between $7.3 million and $8.2 million.


Comvita shares have traded higher than (© Copyright Protected - The National Business Review 86)the Cerebos offer, reaching a high of $3 on November 23 before settling back to below $2.80 last week.

Duncan Bridgeman
Tue, 06 Dec 2011
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Cerebos to let Comvita takeover offer lapse