GraceKennedy Group, which has majority control of Key Insurance Company, has made a take-over bid for the 27 per cent remaining equity for J$403.7 million at a price of J$2.70 per share.

GK Group, which currently owns 73 per cent equity is seeking to buy the remaining stake held by the public in its pursuit to own 100 per cent of the issued share capital of Key Insurance, from which it bought majority control four years ago.

The take-over for the remaining 149, 521, 334 ordinary stock units, will open on March 24 and closes on April 22. Grace is assuring that adequate available funding is in place to ensure the financial completion of the offer in accordance with its terms. The finance and manufacturing conglomerate has internally generated resources that will cover the purchase price in full, including all expenses that may arise in connection with the transaction. 

First Global funds guarantee

First Global Bank, GraceKennedy’s banking subsidiary, has issued a true and complete copy of an availability of funds letter dated February 27 in favour of the group, confirming that there are sufficient funds available to complete this transaction.

The letter is among the documents available for inspection by Key Insurance shareholders interested in selling their shares. 

Grace has appointed JCSD Trustee Services at 40 Harbour Street, downtown Kingston, as the principal receiving agent and appointed GK Capital Management as lead broker.

The offer may be accepted by completing the Form of Acceptance and submitting it along with the relevant share certificates to either JCSD Trustee Services or GK Capital Management.

Payments for accepted Key Insurance shares will be made by wire transfer to the tendering Key shareholders’ bank accounts or securities dealer accounts within three business days after the accepted shares are transferred to GraceKennedy. Wire transfer fees may be deducted from payments made by wire transfer. Key is currently listed on the Jamaica Stock Exchange (JSE) main market, and under domestic stock market rules, a company can be delisted if a single shareholder, directly or indirectly, controls more than 80 per cent of a company’s listed shares.

If upon completion of the offer, GraceKennedy’s ownership stake exceeds the 80 per cent threshold, it intends to delist Key Insurance from the stock market. 

Compulsory acquisition

It is expected that this will become effective after the process of “Mandatory Acquisition of Minority Shares”. If the offer is accepted by Key Insurance shareholders representing at least nine-tenths of the total value of the company’s issued ordinary stock units, Grace intends to exercise its rights under Section 209 of the Companies Act to compulsorily acquire the shares of all remaining shareholders, regardless of whether they have expressly dissented or failed to respond to the offer.