Peter Permell

‘SMALL VICTORY’: Peter Permell

MINORITY shareholder advocate Peter Permell is the only shareholder of Readymix (West Indies) Ltd who will be receiving $13.42 per share, which is more than $2 greater than other minority shareholders received from Trinidad Cement Ltd (TCL) in 2017.

This comes after the High Court in Port of Spain yesterday delivered its ruling in an application filed by TCL for the court to fix the fair market value of the Readymix shares, after Permell refused to accept the company’s offer of $11 per share.

In delivering her ruling, Justice Eleanor Donaldson-Honeywell said based on expert assistance provided by BDO Trinidad to the court she has fixed the fair market value as $13.42, which is a 22 per cent premium over the TCL offer price.

“In so deciding, I recognise, as submitted by both sides, that the court is not bound to accept either of the two values assessed by the expert. However, in my view, the expert’s report is well reasoned and provides the full scientific basis for the valuation,” said the judge.

The history of the matter dates back to March 27, 2017, when TCL made a takeover bid for all the Readymix shares not already owned by it. At that time the Readymix shares were owned by 497 shareholders. TCL was the largest of these shareholders owning 8,531,977 shares or approximately 71.1 per cent of its subsidiary.

In its takeover bid, TCL made an offer of $11 per share to the minority shareholders based on an independent valuation of Readymix by PricewaterhouseCoopers Advisory Services Ltd, which estimated the fair market value to be between the range of $10.25 and $11.13.

The takeover bid closed on May 1, 2017, and was accepted by 53 of the minority shareholders including Colonial Life Insurance Company Ltd, RBC Trust, JMMB Investment Ltd and Tatil Life Assurance Ltd.

These shares amounted to approximately 49.9 per cent of the shareholdings of the minority shareholders.

Following the close of the takeover bid, TCL was contacted by several Readymix shareholders including the Trinidad and Tobago Electricity Commission (T&TEC) Pension Plan who wished to sell their shares at the offer price.

During the mop-up period, 39 more shareholders sold their shares at the offer price.

Following the acquisition made under the takeover bid and during the mop-up period, TCL held more than 90 per cent of Readymix shares.

Under By-Law 26(1) of the takeover By-Laws, once TCL acquired over 90 per cent of the shares, the remaining shareholders were entitled to require it to acquire their shares.

Permell was the only minority shareholder who refused the $11 and instead elected to have a fair market value set by the court.

Following the ruling, Permell told reporters that the judgment was a “small victory” for him “but a huge victory for minority shareholders, not just in Trinidad and Tobago but in the region”.

“I really did this because the jurisprudence in this particular area is very, very scarce. There are no decided cases in the region where minority shareholders have had the court fix their fair value in relation to that By-Law 26.

“So what I wanted to ensure was that there was precedent. There were attempt to have the matter settled out of court and so on but we would not have gotten this judgment. So I really resisted those attempts and I wanted to ensure that a judgment was handed down. Justice Donaldson-Honeywell’s judgment will act as a precedent, as a basis, as a blueprint and as a roadmap for other minority shareholders,” he said.

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