The bitter takeover battle for Barbados beverage maker Banks Holdings Limited (BHL), which has pitted T&T conglomerate ANSA McAL Limited against Brazilian beverages giant Ambev, has taken another twist.
A Barbados court has granted a temporary injunction to ANSA McAL blocking the sale of BHL. ANSA McAL has until November 11 to raise objections to the sale of the company.
Attorney for BHL Barry Gale QC is warning, however, that the move will have implications for the company and shareholders.
“The agreement in question requires that any dispute should be resolved through arbitration. And not just arbitration in Barbados but arbitration in Miami, applying New York law,” he said during a media conference in Barbados where BHL officials reacted to the filing of the injunction.
“So the goal we have in those circumstances to commence arbitration in a foreign jurisdiction, which could be very expensive, protracted to the company and certainly not in the interest of shareholders, particularly in the environment of a competing ongoing bidding process, because the effect of that would be, as we’ve now seen from the court order, to bring everything to a stop, resulting that shareholders who are anxiously looking forward perhaps to a premium, a substantial premium on their shares, may not reap the benefits of the offers that are presently on the table,” Gale said.
ANSA McAL said in a statement that the injunction means that until November 11, no one will be allowed to solicit or negotiate the purchase or sale of BHL shares. With the court order, ANSA McAL (Barbados) Ltd is now free to contest the 2010 agreement made between BHL and Ambev subsidiary SLU Beverages Ltd, “in the interest of all shareholders.”
CEO of ANSA McAL (Barbados) Limited, Nicholas Mouttet, said the company was keen to avoid any unnecessary delays in the takeover process and had asked the court for a short interim injunction period and an early hearing to limit inconvenience to shareholders.
The court’s restraining order states that BHL is not allowed to act on two of the provisions of the Convertible Debt Purchase Agreement dated June 24, 2010 which was made between BHL, Latin Capital Fund 1, LP and SLU Beverages Ltd.
The court named these two provisions as Article 6.2(b), “which provides for certain pre-emptive rights in respect of the unissued share capital of the Defendant”; and Article 8, “which provides for the mandatory repurchase or redemption by the Defendant of the common shares issued pursuant to the said agreement.”
The injunction also ordered that “all bidding and other activities…related to the pending offer and take-over bids submitted by the bidding parties shall forthwith cease; and…the bidding parties shall be and are hereby restrained from taking up and paying for any shares that may have been tendered to their respective bids and not previously withdrawn.”
BHL has been warned by the court that if it disobeys the order, “you and any of your directors may be held to be in contempt of court and may be imprisoned, fined or have your assets seized.”