$42m pay-out from the ABDAB stake purchase

Published On:Friday, May 28, 2010

By NEIL HARTNELL

Tribune Business Editor

THE investment vehicle majority-owned by Sir Garet 'Tiger' Finlayson and his family is set to pay out at total $42 million dividend to its shareholders following the $100 million-plus sale of its stakes in Commonwealth Brewery and Burns House, it was revealed yesterday.

Based on the announcement of a $14 per share dividend, and 2,985,262 shares being issued and outstanding, the dividend set to be declared by the Associated Bahamian Distillers and Brewers (ABDAB) will total some $41.794 million, a sum likely to keep happy dissenters who previously raised questions in Tribune Business about the process surrounding the divestment of the Burns House/Brewery stakes.

ABDAB yesterday attempted to clarify the situation surrounding the sale of its Burns House Commonwealth Brewery stakes, which is believed to have earned the company $120-$125 million, via an advertisement in Tribune Business.

The message, said to come from the company's president, Mark Finlayson, said the move to sell ABDAB's major assets was approved at the company's annual general meeting on January 4, 2010, with 76.2 per cent of the shareholders present.

The Securities Commission was subsequently informed that the deal had been approved, with government approval received on April 28, 2010.

The deal would always have been approved, given that Sir Garet holds a majority 58.5 per cent stake in ABDAB through General Bahamian Companies. He is also supported by a further 56,250 shares owned by Maratani Holdings - believed to be a vehicle for his children, Mark, Rae, Tanya and Nikki. Together, those holdings account for a 60.4 per cent stake.

However, observers said the unresolved issues related more to the process by which the deal was approved, and questioned whether all investors had received adequate notice of the AGM and what was on the agenda. The AGM took place on January 4, just after the New Year, and the notice would likely have gone out in or around the Christmas period, when minds were elsewhere.

Tribune Business's calculations also showed that Bradley Roberts, the PLP chairman and former minister of works, holds a 3.3 per cent stake in ABDAB via 97,358 shares, while another long-standing business partner of Sir Garet, Franklyn Wilson and his family, hold 19,125 shares.

It is difficult to work out the stake held by Sir David Gibbons, ABDAB's second largest shareholder, as his shares are held in the name of a corporate entity. Two appear on the shareholders register, North American Finance, which owns 591,409 shares, or Westward (Grand Cayman) Ltd, which owns 333,333. Both companies share the same Bermuda address.

If Sir David is the ultimate beneficial owner of both, he effectively controls a 30-plus per cent stake in ABDAB.

Minority shareholders had previously told Tribune Business they were questioning whether they would benefit from the Burns House/Commonwealth Brewery sale, having received zero information on it.

T. B. Donaldson, the former Central Bank governor and current Commonwealth Bank chairman, who holds some 604 ABDAB shares, told Tribune Business: "The answer is no", in response to whether he had received any information on the Heineken transaction/.

He added: "I doubt whether any shareholders received anything. I seldom receive anything from, them. I'd be quite surprised if anyone received anything at all."

When asked whether he hoped to receive a dividend from ABDAB, as a result of the company receiving a nine-figure sum from Heineken for its stakes, Mr Donaldson replied: "I hope so, but I never hold my breath."