Hostile ICBL takeover possibility

The possibility exists that the Insurance Corporation of Barbados (ICBL) could be at the centre of a hostile takeover bid if a party other than Paynes Bay Finance or its subsidiary Hamilton Financial Limited, was behind the recent purchase of several million ICBL shares.

The possibility has been floated by market watcher and interim head of the Barbados Association of Corporate Shareholders Douglas Skeete, who said he had no confirmation at this stage who made the big purchase of about 10 million ICBL shares

Speaking during a recent radio programme, Skeete said: “It could be that the other entity is looking to acquire 25 per cent of the outstanding shares that could trigger a takeover so we could have a second takeover bid from another entity.

“The assumption is that this could be the same [Paynes Bay Finance] trying to acquire the remaining 48.8 per cent of the shares. We can only make some assumptions. We don’t have the information.”

Paynes Bay Finance acquired controlling interest in ICBL in September from Bermuda Fire & Marine (BF&M) who had purchased the insurance company during Government’s programme to privatize state assets.

“The majority shareholder Paynes Bay Finance still has some way to go in acquiring a complete purchase of all the outstanding shares in ICBL.

“The company would need to acquire another 15 million shares to reach the 90 per cent threshold so it can trigger a compulsory acquisition of the remaining shares,” Skeete explained.

The accountant, who has been a long-time advocate for minority shareholders in public companies, also commented on the decision by the board of ICBL not to pay a final dividend this year to shareholders.

Skeete said: “We don’t know the reason for the resignation of director Sir Paul Altman. But on the issue of the dividends, one can [assume] that decisions are being taken presumably to frustrate minority shareholders and therefore frustrate them to the stage where they might consider selling their shares.

“That is something one could assume,” he said.

In this regard, Skeete urged minority shareholders to hold on to their investments.

“The decision of the company not to pay dividends by itself doesn’t mean . . . that the shares are not worth anything. They are only worth $1.78 now but the owners will likely be looking to expand the company and probably diversify into whatever business can be brought to the fore and make it more profitable.

“Stay the course. You don’t have to rush and sell the shares at the $1.78,” Skeete noted.

Meanwhile, all eyes are on the National Insurance Scheme (NIS) the second largest shareholder in ICBL.

Deputy chair of the NIS Avinash Persaud has publicly stated the NIS would not be disposing of its ICBL shares at the current offer rate.

ICBL has 2300 shareholders inclusive of institutional investors and individuals.