Cerebos takes next step in takeover offer for Comvita

Cerebos takes next step in takeover offer for Comvita Limited

Cerebos New Zealand Limited has today advanced its full cash takeover offer for Comvita Limited with the mailing of its Offer Documents to all Comvita shareholders.

The Offer price for the ordinary shares of $2.50 per share represents:
• a 43% premium to the $1.75 price that Comvita shares were trading at immediately prior to Cerebos making its approach to Comvita on 26 August 2011
• an attractive valuation multiple for Comvita at this stage of its growth cycle
• an opportunity to exit for cash from a very illiquid stock and at a time of significant market volatility.

The Offer will be open for acceptance for 45 days unless extended in accordance with the Takeovers Code and is conditional on, among other things, receiving acceptance from holders or controllers of at least 90 per cent of voting rights in Comvita and the approval of the Overseas Investment Office.

Cerebos New Zealand is a wholly-owned subsidiary of leading food and health supplements enterprise Cerebos Pacific Limited, which has extensive interests in Asia and New Zealand and Australia and corporate headquarters in Singapore. Its flagship product is BRAND’S® Essence of Chicken is the category leader selling over 150 million bottles in Asian markets last year. In New Zealand, food and coffee brands of Cerebos Gregg’s are to be found on the shelves in the kitchens of most households.

Cerebos Gregg’s Chief Executive Office Food and Coffee Division, George Crocker, said the Cerebos New Zealand’s Offer had been mailed to Comvita shareholders today to comply with the timing requirements of the Takeovers Code.

“Our Offer of $2.50 a share (first advised to the market on 14 October 2011) 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. We are now looking forward to receiving the Independent Appraisal Report.”

Mr Crocker noted that Cerebos New Zealand’s Offer was the only offer available to Comvita shareholders and, if it did not succeed, in Cerebos’ view there was every likelihood that the price of Comvita’s shares would retreat again.

Throughout most of its eight year trading history the Comvita share price has traded below the price at which Cerebos New Zealand is offering. Comvita also has a history of falling short of mid-year profit guidance, Mr Crocker added.

Cerebos has been an investor in New Zealand for 50 years. Its subsidiaries in New Zealand are Cerebos Gregg’s, Caffe L’affare and Atomic Coffee Roasters. Cerebos Gregg’s is a well known supplier to supermarkets of such brands as Gregg’s – with products such as herbs & spices, instant coffee, sauce and jellies - Robert Harris, Raro, Whitlocks, Bisto and Cerebos.

Recently it has approved a $6 million upgrade of New Zealand’s only instant coffee processing plant, in Dunedin, and it also supported the recently commissioned $13 million refinery expansion operated by the Dominion Salt joint venture at Mt Maunganui.

Cerebos acknowledges Comvita’s achievements in producing a range of health and medical products based on the unique attributes of manuka honey.

“It would be Cerebos’ intention to operate Comvita as a largely standalone business and make available Cerebos’ marketing expertise in Asia and its commitment to research and development to achieve accelerated growth. This will deliver additional benefits for the honey industry in New Zealand, including to suppliers and those involved in existing research projects funded by Comvita,” Mr Crocker said.

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