- NEWSDAY.CO.TT - A la Une - 10/Jul 07:15

Agostini stakeholders agree to Prestige Holdings acquisition

OVER 100 shareholders of Agostini Ltd voted to move forward with the acquisition of Prestige Holdings Ltd (PHL) through a share swap agreement which would see Agostini expanding into the restaurant sector, at an emergency general meeting (EGM) at Hyatt Regency, Port of Spain, on July 9. CEO Barry Davis said Agostini (AGL) proposes a share swap of one AGL ordinary share for every 4.8 PHL shares. Shareholders in PHL will be issued 13,022,334 new common shares in the capital of AGL in consideration for the acquisition of 100 per cent of the issued and outstanding common shares of PHL. The company would need 96.9 per cent of PHL shareholders to agree to the offer for the swap to be successful and AGL to bring PHL into the fold as a subsidiary. The expected closing date of the offer is July 21 and the settlement of the offer, provided the needed shares are acquired, is July 31. In a notice, PHL's board advised its shareholders to accept the offer, which would see them receive a special dividend of 50 cents to all shareholders on their register as of July 18. Payment is dependent on AGL being successful in its offer. Speaking to the shareholders present at the EGM, Davis said the move will benefit both companies. "The joining together of two profitable, strong organisations would result in synergies for both organisations, from indirect cost optimisation, delivery perspective, foreign exchange and operational perspectives. "I believe the TT share of Prestige’s operations accounted for 133 of the 136 restaurants and this provides us a significant opportunity to help them expand beyond TT. [caption id="attachment_1165601" align="alignnone" width="1024"] Shareholders raise their hands, taking a vote, at a special meeting hosted by Agostini Ltd at Hyatt Regency, Port of Spain, on July 9. - Photo by Faith Ayoung[/caption] "In our group, we have the experience, skills, infrastructure and people operating outside of TT and the English-speaking Caribbean and we can enhance PHL’s expansion outside of TT. PHL has indicated they want to expand and being part of the Agostini group would help them expand." AGL is focused in three core segments – pharmaceutical/healthcare (Aventa, Superpharm, Mpharmacy), consumer products (Acado) and energy/industrial (Rosco Procom and Agostini Solutions). PHL is the parent company to KFC, Subway, Pizza Hut, TGI Fridays and Starbucks franchises. The group has 136 restaurants, 133 of various types in TT, two Starbucks franchises in Guyana and one TGI Fridays in Jamaica. The Agostini group currently operates in TT, Barbados, St Lucia, St Vincent, Grenada, Jamaica, Guyana, Curacao, Aruba and Canada. Davis said some of the key factors for consideration were the integration of a new business segment for AGL; treasury management and foreign currency allocation, as operating outside of TT would mean the companies were not restricted in terms of foreign exchange access; dependence of franchisors, as AGL intended to leave the management team in place; and the offer price and earnings per share, as the PHL shareholders will get an immediate 30 per cent return on their investment. Asked whether the offer is a move to further create an industry monopoly, Davis told Business Day that AGL was not in the restaurant business. "This is a new segment, so there’s nothing associated with being a monopoly. "We have no restaurant business and this would be our first foray into the restaurant business. "Superpharm is a retail operation and they may be slightly related from the vantage point of having the Presto brand, which may be a bit of food, but it’s not a restaurant. It is very different so I don’t think it has any implications from a monopoly perspective." Davis was asked whether AGL would take action on less than successful franchises, as it was well-known that the work ethic of people employed in PHL’s restaurants, especially KFC, was less than ideal. "We would want to ensure that best practices from both sides are implemented, so we look at what we have, we look at what they have and we would ensure there are synergies and best practices. "We take the best of both worlds and hopefully improve the whole. [caption id="attachment_1165603" align="alignnone" width="1024"] Justin Charles, an Agostini Ltd shareholder, poses a question to the board of directors regarding the share-swap offer with Prestige Holdings Ltd at a special meeting on July 9 at the Hyatt Regency, Port of Spain. - Photo by Faith Ayoung[/caption] "When we go in, there may be opportunities for improvement and there may be opportunities for us to use their systems and processes within our organisation, so we can’t do anything until we go in. "We invest significantly in people to ensure we have the best service possible. We know PHL would have extensive staff training and we expect it will continue." After the meeting, one stakeholder told Business Day he was in agreement with the move. "The proceedings were straightforward, everything was discussed in depth, shareholders got additional insight into the transaction and not surprisingly the resolution passed unanimously. "From Agostini’s perspective it continues their growth and expansion and it allows PHL a greater platform for growth." Another stakeholder echoed these thoughts, saying the presentation was insightful. "They answered all the questions anyone could have. I think the acquisition will be beneficial for both companies and I don’t see anything that could hinder their progress." One stakeholder said he did not agree with the acquisition and did not raise his hand when called upon to vote. "I find they should have stayed separate, but I am only one person. I was surprised when they were taken over because Prestige meeting was earlier this year and they never indicated anything about this. I can’t do anything about it. Apparently the majority of the people don’t mind. I think things happen and they end up going along with it regardless of the implications." One woman said she was also a stakeholder in PHL and definitely agreed with the acquisition. "I don’t have a problem at all with them taking over. It will probably do better for us, because Prestige’s dividends aren’t as nice as we’d like them to be, so I figure we’ll do better with Agostini overall." The post Agostini stakeholders agree to Prestige Holdings acquisition appeared first on Trinidad and Tobago Newsday.