Call for 'accessible' Heineken IPO

By Scott Armstrong ~ Guardian Business Editor ~

Bahamian investors with more modest sums in their pockets should not be barred from enjoying a flutter on their favorite tipple, one leading advisor has insisted.

Kenwood Kerr, Providence Advisors' chief executive, today toasted the news that Heineken is set to completely take over the reigns at Commonwealth Brewery and Burns House Group, after the deal was confirmed on Monday afternoon.

Part of the takeover will see Bahamians offered the chance to purchase 25 percent of the company in an Initial Public Offering (IPO) - suggested to be worth some $60 milllion - which bosses hope to proceed to by the end of this year.

Speaking to The Nassau Guardian, Kerr said: "We haven't had an IPO on the local market since say 2000, that might have been for a number of reasons including the appetite for risk.

"But to have a prospect like this with a globally recognized brand such as Heineken is quite a landmark.

"You could call it a watershed moment and it is an excellent opportunity for Bahamians to become shareholders with a partner who is as recognizable to us as Anheuser Busch is to Americans.

"This will be positive for the market and is a long-term opportunity for Bahamians to participate in, combined with the Arawak Cay port deal this could jump-start the equity market.

"I think allowing the individual access to this deal is important.

"Yes there are the institutional investors who will be gearing up for this and getting their cash ready but there should be the chance for people to invest $100 as opposed to a minimum of $10,000.

"That will mean that those average Heineken drinkers get the chance to invest their money. The structuring will be critical and I hope the deal will be accessible and the financial bar set low enough for that."

Heineken and the Associated Bahamian Distillers and Brewers Limited (ABDAB) finally announced they signed the deal for the takeover on Monday after months of negotiations

In a joint statement the parties confirmed that Heineken now has 18 months in which to sell a quarter of the business to the public, but bosses insisted they would strive to do it by the end of the year. Any unsold shares from that quarter stake will be purchased instead by the Government.

The deal sees the shares owned by the ABDAB - controlled by Sir Garet 'Tiger' Finlayson and his son Mark - finally transfer into the Heineken's ownership.

The deal is one of the most highly anticipated deals on the market with some investment analysts calling the share issue a 'license to print money'.

The Nassau Guardian revealed last week that the deal had received Government approval with Prime Minister Hubert Ingraham saying it helped broaden ownership of wealth to ordinary Bahamians.

Wednesday May 19, 2010