Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Bounty Fresh mounts $437.8M takeover bid for Tegel

Philippines-based Bounty Fresh mounts $437.8M takeover bid for Tegel

By Paul McBeth

April 26 (BusinessDesk) - Philippines-based poultry group Bounty Fresh Foods will mount a $437.8 million takeover bid for NZX-listed Tegel Group at a 50 percent premium to the share price, which has been beaten up after multiple earnings downgrades.

The Filippino company already has Tegel's cornerstone shareholder Affinity Equity Partners on board, signing a lock-up agreement with the holding company Claris Investments for a 45 percent stake. The offer of $1.23 per share is a premium to the 82 cents the stock closed at on Tuesday, although it's still a discount to the $1.55 price the shares sold at in the 2016 initial public offering.

Bounty Fresh will pursue a full takeover when it formally lodges an offer, but will accept a 50 percent stake, the notice of intention document shows. Other conditions include securing Overseas Investment Office approval and for Tegel to meet certain earnings thresholds.

"Tegel is a leading brand in the New Zealand market with real potential to expand into international markets, particularly the Philippines where Bounty Fresh Group’s sales and distribution networks are extensive,” Bounty Fresh president Tennyson Chen said in a statement. "We believe our group is naturally aligned to Tegel, and our offer is motivated by a desire to further grow the Bounty Fresh Group beyond the Philippines."

The NZX-listed company's board has appointed a sub-committee including chair David Jackson and independent directors Bridget Coates and George Adams to respond to the unsolicited offer, and advised shareholders to seek professional advice before taking any action.

"While noting the draft offer price represents a 50 percent premium to the 82 cents close price of Tegel shares on 24 April 2018 on the NZX, the independent directors consider it too early to comment on the draft offer at this time," Jackson said. "In particular, the independent directors do not yet have full details in respect of Bounty’s proposed strategy for Tegel, which is something we are focused on."

Bounty Fresh, via Bounty Holdings New Zealand, wants to use its existing sales and distribution channels to sell Tegel products to boost exports to the Philippines and Indonesia, and wants to supplement export growth into Asia.

"Bidco views the investment in TGH as a long-term, strategically important business to the Bounty Group with no short to medium term intention to exit," the notice said. "As such, Bidco may evaluate business decisions using criteria that are oriented towards long-term business sustainability."

Last month, Tegel downgraded its 2018 earnings outlook citing slower progress in Australia, and one-time costs ranging from compliance rule changes to restructuring and disruptions to its New Plymouth processing plant. The company has failed to meet the earnings forecasts in its offer documents as a glut of domestic chicken constrained prices, which has seen the share price drop 30 percent so far this year.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

National: National Backs Businesses With $10k JobStart

National will provide a $10,000 cash payment to businesses that hire additional staff as part of our commitment to keeping New Zealanders in jobs, National Party Leader Todd Muller and Finance spokesperson Paul Goldsmith have announced. Our JobStart ... More>>

ALSO:

DIY Law: Government Exempts Some Home Improvements From Costly Consents

Homeowners, builders and DIYers will soon have an easier time making basic home improvements as the Government scraps the need for consents for low-risk building work such as sleep-outs, sheds and carports – allowing the construction sector ... More>>

ALSO:

Media Awards: The New Zealand Herald Named Newspaper Of The Year, Website Of The Year At Voyager Media Awards

The New Zealand Herald has been labelled a “powerhouse news operation” as it claims the two biggest prizes – Newspaper of the Year and Website of the Year – along with many individual awards at the 2020 Voyager Media Awards Website of the ... More>>

ALSO:

ASB Bank: ASB Takes The Lead Again With New Low Home Loan Interest Rate

ASB has moved again to support its customers, cutting a number of home loan rates, including the two-year special rate to a new low of 2.69% p.a. Craig Sims, ASB executive general manager Retail Banking says the reduced rate will be welcome news for many ... More>>

ALSO:

Nathan Hoturoa Gray: The Problems With Testing And Case Statistics For Covid-19

To begin to understand disease transmission in a country requires adequate testing of your population with properly vetted, accurate tests. As the world struggles to find what 'adequate percentage' of the population is necessary, (estimates predict ... More>>

ALSO:

RNZ: Fletcher Building To Lay Off 1000 Staff In New Zealand

The construction company will cut around 10 percent of its workforce as it struggles with the fallout from Covid-19. More>>

ALSO:

Can Pay, Won't Pay: Cashflow Moves Urged

Government Ministers are asking significant private enterprises to adopt prompt payment practices in line with the state sector, as a way to improve cashflow for small businesses. More>>

ALSO:

Gordon Campbell: On Why We Should Legally Protect The Right To Work From Home

For understandable reasons, the media messaging around Level Two has been all about “freedom” and “celebration”, but this is not necessarily going to be a universal experience. When it comes to workplace relations, Level Two is just as likely to ... More>>

ALSO:



Auckland Airport: Thousands Of Kiwis Travelling For Queen’s Birthday Weekend


Confidence in domestic travel is beginning to steadily ramp up, with thousands of Kiwis travelling within New Zealand for Queen’s Birthday.
Nearly 400 flights will be operating to and from Auckland Airport over the long weekend... More>>

ALSO:

Science Media Centre: Understanding 5G Concerns – Expert Q&A


Recent attacks on cell phone towers have brought concerns over the rollout of 5G technology into sharp relief.
While scientific research has consistently shown that the technology does not adversely affect human health, public concerns about its impact have spread around the world, fueled in part by growing misinformation online. The SMC asked experts to comment... More>>

ALSO:


Trade: Record Monthly Surplus As Imports Dive

Imports in April 2020 had their biggest fall since October 2009, resulting in a monthly trade surplus of $1.3 billion, Stats NZ said today. “This is the largest monthly trade surplus on record and the annual goods trade deficit is the lowest ... More>>

ALSO:


Media Blues: Stuff Chief Executive Buys Company For $1

Stuff chief executive Sinead Boucher has purchased Stuff from its Australian owners Nine Entertainment for $1.
The chief executive was returning the company to New Zealand ownership, with the sale is expected to be completed by 31 May.
"Our plan is to transition the ownership of Stuff to give staff a direct stake in the business as shareholders," Boucher said in a statement.... More>>

ALSO:

RNZ: Bar Reopening Night 'much, Much Quieter'

Pubs and bars are reporting a sluggish first day back after the lockdown, with the fear of going out, or perhaps the joy of staying home, thought to be a reason for the low numbers. More>>

ALSO:

Stats NZ: New Zealand’s Population Passes 5 Million

New Zealand's resident population provisionally reached 5 million in March 2020, Stats NZ said today. More>>

NIWA: Seven Weeks Of Clearing The Air Provides Huge Benefits: Scientist

Seven weeks of lockdown has provided evidence of how pollution can vanish overnight with benefits for the environment and individuals, says NIWA air quality scientist Dr Ian Longley. Dr Longley has been monitoring air quality in Auckland, Wellington ... More>>

ALSO:

Government: Milestone In Cash Flow Support To SMEs

A significant package of tax reforms will be pushed through all stages in Parliament today to throw a cash flow lifeline to small businesses. More>>

ALSO: