A battle is brewing for control of medical honey products manufacturer Comvita after the coffee and food giant, Cerebos Greggs, made a $71.6 million takeover offer.
Cerebos is offering $2.50 a share for Comvita - a premium of 19% on Thursday's closing price. Comvita's share price has been on a rollercoaster since 2008, but has been steadily rising since February due to better sales.
Cerebos Gregg's chairman Trevor Kerr told Checkpoint that it's an attractive offer and Comvita's products provide a good strategic fit with his company's coffee, food and health supplements range.
He says, if successful in its bid, Cerebos would help Comvita to grow because it would allow the honey products manufacturer to access to a sales and marketing network in Asia and research and development capability in both Australia and Asia.
However, Comvita's board is urging shareholders not to accept the offer.
Chairman Neil Craig describes it as unsolicited, unwelcome, opportunistic and unwelcome, opportunistic and undervaluing Comvita by a significant margin.
He told Checkpoint the board has used those words with considerable thought in view of the prospects they see in the future.
"This is a very high-growth company, with high profit aspirations, gross margins increasing even when the currency is against us dramatically, so this is just a completely inappropriate number to think about if you're really serious about taking over Comvita."
He says he has been contacted by shareholders who are angry at the level of the offer.
On 14 September Comvita issued a profit forecast of between $7.3 million and $8.2 million for the 2011/12 year based on a boost in sales for the year from $82 million to between $93-94 million.
On Friday, shares in Comvita rose 45 cents, or more than 21%, to $2.55.
Cerebos Greggs - which is listed on the Singapore stockmarket - has sales of $150 - $200 million in New Zealand.
Its brands include Gregg's and Robert Harris coffee, Raro powdered drinks, Gregg's herbs and spices, Cerebos salt, Bisto gravies and Whitlocks condiments and sauces.
