Comvita chairman Neil Craig is advising shareholders to reject a takeover offer from Singapore listed Cerebos Pacific.

In a letter to shareholders, he advises shareholders of the Paengaroa based bee products company not to sell their stock, saying the company is on the verge of reaping the rewards of long-term planning.

'We have turned round and said we think the bid's opportunistic and undervalues the company by a considerable margin and it's uninvited basically.”
Neil says the shares were trading at $2.10 on Thursday and they are now trading at $2.60 and the Cerebos bid is at $2.50, so basically it's forced the price up.

His advice to shareholders is to hang in there.

'Over the next couple of years it's going to be very, very considerably higher than $2.50.

Not only is it cheap today, but it's a heck of a lot cheaper than it will be further on in simple terms.”
Cerebos Pacific filed a takeover bid with the New Zealand Stock Exchange which means they are going to launch a bid for the full take over of Comvita, says Neil.

It's a process that takes 45 days overall.

'It's a very proscriptive process, it takes time to unwind and there are lots of twists and turns in it.

'Other parties can come and bid and over bid, and the existing bidder can increase their prices. It's the beginning of a process.”

Neil says the directors considers Comvita's current share price on the NZX does not fully reflect the value of the company and the potential to increasingly reward shareholders from this year onwards.

Comvita expects an annual profit of between $7.3 million and $8.2 million, with sales likely to be between $91 million and $95 million.

Cerebos Gregg's, whose local brands include Caffe L'Affare coffee, Bisto gravies, and Raro drink powder, recently invested $13 million to expand facilities in a joint venture at Mount Maunganui, and is spending $6 million on the country's only instant coffee producing plant in Dunedin.

The offer is conditional on Cerebos reaching 90 per cent acceptances to force the compulsory acquisition of the remaining shares, and let it delist the company.

If it falls short and decides to declare the takeover unconditional, it will seek appropriate representation on the Comvita board.