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Cerebos says it won't lift Comvita offer to meet independent value range

Tuesday 6th December 2011

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Cerebos says it won’t lift its $2.50-a-share offer for Manuka honey products maker Comvita, making it more likely the $71.6 million proposal will fail when it closes on Dec. 22.

Cerebos Gregg’s chief executive George Crocker says his company doesn’t accept an independent valuation of Comvita of $3.40 to $4, based on forecast earnings.

The offer “was priced on our understanding of the risks inherent in the operations of Comvita and the Manuka honey industry and the risks and costs associated with achieving continued growth in Asia,” Crocker said in a statement. “These factors do not justify a price anywhere near the valuation range.”

Shares of Comvita soared more when Cerebos first made its approach on Oct. 14 at a price the shares hadn’t achieved since May last year. The stock traded at $2.75 yesterday, having been bid up on speculation Cerebos would sweeten its offer.

Cerebos New Zealand, the local unit of Singapore-listed Cerebos Pacific, has local brands including Caffe L’Affare coffee, Bisto gravies, and Raro drink powder. It plans to delist Comvita if it wins 90 percent of acceptances, the minimum level needed to force compulsory acquisition.

Crocker has said Cerebos would look at alternative ways to enter Manuka honey manufacturing, including working with local suppliers.

Comvita chairman Neil Craig has said his board sees more value in the Manuka honey products maker and would be happy for Cerebos to walk away. He has described the offer as “unsolicited, unwelcome (and) opportunistic.”


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