Dulal-Whiteway, chief executive officer, Neal & Massy
Photos: JENNIFER WATSON
that is tied up
in a very short period of time, you dont know when
youd be able to use it. You cant tell the bank
I want this money on 30-day call or
60-day call. It must have cost us about US$15,000
a day in interest.
Now that Neal & Massy (N&M) Holdings Ltd has been
given the all clear to acquire the much sought after Bajan
conglomerate Barbados Shipping & Trading Ltd (BS&T),
there will be no name change for the new entity.
not going to be a name change again, said N&M
chief executive officer Bernard Dulal-Whiteway.
do not envisage at this point in time to take into N&M
the BS&T name. That decision was made from the time
we went into the takeover.
He spoke in an interview on Monday at his office on Park
that its been an acquisitionan acquisition I
would say which was hostile to some extentits
been a situation also where we think weve paid a very
He also made it clear that N&M has no intention of subsuming
the BS&T brand, which he said was iconic in Barbados,
into the N&M name.
is much better known in Barbados, so that wed want
to make sure the BS&T Barbados name continues because
its such a significant player, Dulal-Whiteway
Among BS&Ts top brands: Almond Beach Village,
Supercentre, United Insurance.
(BS&T) is part of the corporate DNA of Barbados,
The acquisition of BS&T will add several new business
lines to the activities of the N&M Group: hotels (Almond),
beer brewing (Banks Holdings) and insurance (United Insurance,
which contributes about 40 per cent to BS&Ts profits.)
are some businesses that are similar and one would hope
that by bringing them closer together in terms of purchasing,
logistics, information technology systems, that we would
be able to get certain synergies going.
The Pierhead project
Dulal-Whiteway described the development of about 20 acres
of land on Bridgetowns south coast as very exciting
and grandiose involving the Barbados government and the
It is to include hotels, shopping, entertainment and a marina.
The former Owen Arthur government had indicated that it
wanted to play a leading role in the project beyond developing
a marina, that involved ownership.
may mean they will have to compulsorily acquire what we
own, Dulal-Whiteway said.
N&M officials have not yet met with Barbados new
Prime Minister David Thompson.
Long and frustrating
What started off as a mergerwith N&M last year
having 23 per cent of BS&T sharesturned into an
feel that enough information wasnt given to shareholders
and there were some injunctions filed, and while that could
have been resolved in our favour, we were then faced with
an unsolicited bid by (ANSA) McAL for BS&T.
N&M had no choice but to respond.
what McAL came in with, a bid of Bds$7, was not good enough
for us to accept because we always had 23 per cent and if
McAL had come with an offer that we found was very attractive,
one of the positions that we could have had was to withdraw
and sell our shares to McAL.
But McAL came in at Bds$7 and we had to respond and we responded
at a low figure because we were always of the opinion that
what we were trying to do was to create a merged entity.
N&M did not initially want to put cash on the table.
The offers, counter-offers and issues related to the legal
and regulatory struggle, cost N&M US$2 million-plus.
N&M also lost out on daily interest earnings on US$110
million it had deposited with the Barbados National Bank
the time we said our offer had closed and had got the percentage
we had, once we had passed 51 per cent, our offer was unconditionally
accepted by us.
part of it, we had to deposit the funds with our brokers.
that is tied up in a very short period of time, you dont
know when youd be able to use it. You cant tell
the bank I want this money on 30-day call or 60-day
must have cost us about US$15,000 to US$16,000 a day in
BSC removes its cease trade order
Dulal-Whiteway explained that the people who have BS&T
shares will have to get N&M shares in exchange.
you had shares, you had a choice: you could take up to 50
per cent in cash at Bds$8.50; the other 50 per cent you
get it in N&M shares at 2.75 BS&T shares for one
N&M, plus Bds$1.80 for every BS&T share you have.
you are a shareholder with 100 shares, the youd get
Bds$8.50 for. The other 50, you divide by 2.75, and you
get that number in N&M shares, and then youd get
Bds$1.80 for every one of that 50.
Of the shares N&M bought in Trinidad at $28.37 or Bds$9,
Dulal-Whiteway said the Barbados Securities Commission (BSC)
now says it must make that offer to everyone.
merger to acquisition
N&M argues otherwise.
the end of the day, as part of this whole settlement of
everything, what we have agreed is that when you are doing
a transaction like this and you are exchanging shares and
so on, you do not take the price of the share on the market.
Barbadians are saying, well, look, this value is $48, which
is N&M shares divided by 2.75, whatever that is equal
to, and then add Bds$1.80.
Dulal-Whiteway said the methodologies used in the valuation
of companies have nothing to do with market price.
price tends to be influenced by many things. You tend to
use the relative or intrinsic values, he said.
N&M is soon to appoint a valuer, likely to be KPMG International.
The appointment of a valuer is one of the conditions of
the consent order granted by Justice Elneth Kentish in the
Barbados Supreme Court on February 13.
Most of the local auditing firms have done work at some
point for the conglomerate, hence the possible selection
is fairly independent, Dulal-Whiteway said.
What went wrong?
Dulal-Whiteway said one of the first things that went wrong
was the BSC, as regulator, taking legal action before calling
in the relevant parties to discuss its concerns.
just called us, asked what have we done. We explained what
we did and the next thing we know, there was a court order
freezing or stopping N&M from proceeding.
He said it was always questionable as to whether the BSC
ever had the power to do what it did.
changed the law, but like many things, there was a lacuna
(gap) in the law, which basically says they had a conflict.
people who should have been able to do some of the things
the BSC were doing was the stock exchange and not the Barbados
was part of our defence, apart from other things.
A call to resolve the issue
As the weeks and months dragged on, N&M chairman Arthur
Lok Jack wrote to the BSC chairman asking for a chance to
resolve the impasse outside of the courts.
example, the governor of the Central Bank Marion Williams
was of the opinion that the whole financial market in Barbados
was being affected. She felt Barbados was really becoming
the laughing stock of the situation.
they asked Sir Henry Forde, a former attorney general, to
try and see whether he could mediate.
That was six weeks ago.
First, though, a court order had to be drafted as well as
a press release and a joint statement between the BSC and
Regarding the latter, the BSC asked N&M to withdraw
its statements that some of the BSCs actions were
illegal. N&M agreed.
The first lesson Dulal-Whiteway learnt from this experience
was the need for countries in the region to harmonise the
rules governing businesses.
you are talking about capital markets, things keep changing
all the time.
have to have a very proactive legislative process...
you are thinking about wanting to be a serious player in
the capital markets, you cant say you want to be a
financial centre or attract financial interests and then
have outdated legislation and have legislation that is conflicting
with other major jurisdictions.