Giant food company Cerebos' hostile $71 million takeover bid for honey-based manufacturer Comvita will not be increased and it appears it will lapse by the acceptance closure date of December 22.
While Comvita shares had surged from $2.10 to around $2.90 on expectations of a better offer, they traded thinly yesterday around $2.75.
Just as Comvita management strenuously rejected Cerebos' $2.50-per-share offer, labelling it opportunistic and undervaluing the company, Cerebos yesterday rounded on the independent adviser Grant Samual's recent valuation of $3.40 to $4 per share.
Comvita chairman Neil Craig said in a statement Cerebos' offer was an "unwanted attraction" and he expected it to lapse, being well below both the Grant Samual and the board's own valuation.
Cerebos' chief executive, George Crocker, said its $2.50 offer was priced on the risks inherent in Comvita's operations, the manuka honey industry and the risks and costs associated with achieving continued growth in Asia.
"In our view, these factors do not justify a price anywhere near the valuation range indicated by the independent adviser's [Grant Samual] report," Mr Crocker said in a statement yesterday.
Cerebos New Zealand would not be increasing its offer price under its full takeover offer.
The Cerebos offer was conditional on it receiving 90% acceptance from shareholders in Comvita and approval of the Overseas Investment Office, and it retained the option to change the level of acceptance to anything above 50%.
Grant Samuel noted 64% of Comvita's shares are owned by the top 20 shareholders or custodians and their respective support would be "material" for whether Cerebos achieved 90%, or the lower 50% threshold.
