To all Shareholders of Barbados Shipping and Trading Co. Limited (BS&T)

IPL Consortium calls for resignation of Board of BS&T

The IPL Consortium proposes that Shareholders call for a Special Meeting of Shareholders to consider a motion of no confidence in the Board of Directors of BS&T, to demand their immediate resignation and for the election of a new Board forthwith. Such resolutions can be passed as ordinary resolutions supported by a minimum of 50% of the shares voted by those present in person or by proxy.

 

To force the Corporation to call this meeting signed Requisition Forms have to be submitted to the Company by any Shareholders holding in aggregate a minimum of 5% of the total issued shares of the Company. Every vote counts and so even if you own a small number of BS&T shares you can now make your voice heard.

 

Our attorney has prepared a Requisition Form which Shareholders may obtain by clicking here or by calling
Jo-Anne Husbands at 437-3836 to receive a copy by mail. Signed Requisition Forms returned to us will indicate the level of support for our proposal. When we have enough support we will forward the Forms to the Company Secretary and demand that a special meeting be held within 21 days, at which ordinary resolutions will be placed before the Shareholders dealing with the matters raised above.

 

In summary, the reasons for our proposals include the following:

 

1. Failure of the Board to achieve satisfactory financial performance of the Company over an extended period, leading to the amalgamation offer at a significant discount below the book net worth of the Company.

2. Decision to enter into a merger agreement with Neal & Massy without prior approval of Shareholders.

3. Failure to provide shareholders with adequate information to evaluate the amalgamation proposal by Neal & Massy, forcing certain Shareholders to take legal action to obtain such information.

4. Failure to appoint an independent committee and an independent financial advisor to value the Company and to assess the reasonableness of any and all offers made for amalgamation or take-over of the Company.

5. Decision to obtain a valuation of the Company jointly with Neal & Massy “the suitor” and an unwillingness to share the details of the computation of that valuation with the owners (us Shareholders) of the Company.

6. Decision to continue to recommend to Shareholders acceptance of the offer by Neal & Massy, prior to a full evaluation of alternative proposals of which they were aware.

7. Decision to spend Shareholders funds advertising to recommend acceptance of the amalgamation offer made by Neal & Massy.

 

Prior to the Shareholders meeting, which we are demanding, we will hold a meeting for any and all Shareholders who wish to attend to discuss the process for changing the Directors and to agree on a suitable list of candidates to act as Directors of the Company.

  

Tony Hoyos/Colin Brewer

3 August 2007





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ISLAND PROPERTIES LIMITED

The Plantation Complex

St. Lawrence Main Road

Christ Church, Barbados.

Tel. (246) 437 3836 Fax. (246) 437 3838

PRESS RELEASE

23 July 2007

 

Here's what the Barbados Government can do on a merger situation like BS&T - protect the small shareholders

 

The Government has said, correctly, that it must remain impartial in the present battle for BS&T. However, Government can and should, in our opinion, make some simple legislative changes to offer greater protection to minority shareholders in this case and in any future case where an “amalgamation squeeze” is being thrust upon the majority of shareholders by a dominant shareholder, like Neal & Massy.

 

The situation facing BS&T shareholders is that Neal & Massy can use its 23% stake in BS&T, with the vote of a few other shareholders, to force through their amalgamation proposal. With as little as 30% of the total BS&T equity, Neal & Massy’s amalgamation could succeed if there is a low turnout of BS&T shareholders at the special shareholders’ meeting called to vote on the amalgamation. So even if the other shareholders representing 70% of the issued shares do not want to amalgamate BS&T with Neal & Massy they will wake up the next day and find that BS&T no longer exists – it will be a part of Neal & Massy. All those shareholders can then do is take Neal & Massy shares in exchange for BS&T shares or be paid out in cash at a derisory rate of $5.50 per share

 

How is it possible for a 23% interest like Neal & Massy to impose their will in such an important issue? It is because under the Barbados Companies Act, Neal & Massy is allowed to vote on their own proposal. In other countries, with more developed stock exchange regulation, there are safeguards to prevent this type of ploy. For example, in Canada (whose corporate legislation was the model for our Companies Act) in this situation, Neal & Massy would not be allowed to vote its shares in BS&T if they were proposing an amalgamation of BS&T with their own company. So, if this were Canada, when the shareholders vote to determine whether or not to amalgamate with Neal & Massy the decision would be made by the other shareholders only who, in this instance, include thousands of employees, pensioners and ordinary Barbadian investors. This is described as a decision by a “majority of the minority”.

 

We believe that the Barbados Government should and could move quickly to close this legal loophole. The necessary amendments would only require minor amendments to our Companies Act but would immediately provide important protection against the potential abuse of small shareholders’ rights.

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ISLAND PROPERTIES LIMITED

The Plantation Complex

St. Lawrence Main Road

Christ Church, Barbados.

Tel. (246) 437 3836 Fax. (246) 437 3838

 

 

PRESS RELEASE

 

 

Island Properties Limited - July 19. 2007 – statement from Colin Brewer and

Tony Hoyos following recent commentary and advertisement in the public domain concerning BS&T stock

 

The choice is easy!

 

No BS&T shareholder is obliged to accept any of the 3 offers available for sale of their shares and we urge Barbadian shareholders not to sell their shares. However, if any shareholders do wish to sell, they should accept the best offer available and this is simply the highest bid made by any of the potential buyers.

 

• N&M have offered a stock swap which provides a value of $5.51 per share. Those who do not want the N&M stock can receive the same amount, $5.51, in cash. There is no ambiguity in that assessment of value. The BS&T Directors state this as fair value of BS&T shares at page .. of their Circular to Shareholders dated …

 

• Ansa McAl has offered cash of $7.00 per share. However, they have stated publicly that they are willing to pay more than the amount they have now offered. This is a clear admission that they consider the fair value to be in excess of the amount they have offered!

 

• We are prepared to buy the shares of any or all BS&T shareholders who wish to sell at $7.50. This is the only offer that exceeds the book net worth of the Company ($7.31 at March 31, 2007). It also exceeds the most recent price ($7.32 – paid by us) of BS&T shares on the Stock Exchange. So if a shareholder wants to swap their BS&T shares for shares in N&M or Ansa McAl they could sell us their BS&T shares and with those sale proceeds buy more shares on the Exchange than if they accepted the share swap offer by N&M, or more Ansa shares than if they accepted Ansa’s price of $7.00 per BS&T share.

 

 

Our offer is clearly the best offer available for those who wish to cash in on their investment in BS&T.

 

 

The real issue

 

Both Neal & Massy and Ansa make a bogus argument that by being taken over by a foreign conglomerate BS&T will have the size to better compete. This is in fact the only clear argument they make for their action. In our opinion BS&T is not short of capital to allow it to compete effectively locally or overseas - but it is short of visionary, entrepreneurial management. Put simply, a successful company is one which consistently brings the right products and services to the right markets at the right prices. It is a Corporation with a consistent vision and clear identity shared by management, employees, suppliers and customers. Such an institution excels in markets where it has established a comparative advantage, knows what it does well and concentrates on its core activity.

 

BS&T directors and management have not achieved this vision of excellence and thus the company’s assets have underperformed for many years. Neal & Massy has had effective control of the Board and management of BS&T for nearly 9 years but still has not been able to achieve an adequate return on capital employed. So Trinidad management is clearly not the answer to the problem. However, we know that there is the necessary management available in Barbados which could make BS&T perform at its optimal level. The problem for BS&T is that it has mostly chosen its directors and managers from a narrow range of people, mainly employees and former employees and thus has not always benefited from the best in Barbadian management and investment skills and from the objectivity that non-executive directors can bring to a public quoted company

 

We believe that a new Board of Directors, drawn from the widest spectrum of Barbadian entrepreneurial talent, with a significant number of non-executive directors i.e. not full time employees of BS&T, will provide a more objective and aggressive approach to the growth of the Company and will demand a business plan from the management of each of the subsidiary companies that reflects this approach. The Company needs to develop a cohesive image and identity and establish a core business strategy that includes significant foreign investment. If Goddard Enterprises is big enough to do this then BS&T most certainly is as well!

 

As shareholders of BS&T, and speaking on behalf of many other shareholders, we find it necessary to ask why BS&T Board are using the company’s funds to advocate acceptance of the offer from Neal & Massy without fully evaluating any and all other offers.

 

BS&T’s CEO, Tony King published 2 one page advertisements in the local press in which he spoke of management’s successful (in his opinion) management of BS&T and its ever improving performance. Surely a company that is managed so well and whose financial performance is improving would have a fair value in excess of its book value of $7.31. That’s the norm in any takeover or amalgamation of a profitable, well managed, financially sound company. So how could our Directors agree that a discounted price of $5.50 is fair?

 

As shareholders we call on BS&T Directors and management to cease spending the company’s money on press and  television ads (and in indeed in any other manner) in which the CEO and the Chairman, Sir Allan Fields, attempt to convince us that $5.50 is a fair price for our BS&T shares. In light of recent developments we call on the Board immediately to issue a statement withdrawing their recommendation that BS&T shareholders accept the Neal & Massy offer.

 

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Dated:July 12th 2007

Statement from Tony Hoyos in response to PRESS  STATEMENT  from BS&T CEO Tony King

Neal & Massy minority bloc could force amalgamation onto all BS&T shareholders

 

The CEO of BS&T, Tony King, in a recent press statement described Neal & Massy’s amalgamation proposal “as the most democratic of all approaches.” What is democratic about an approach where a minority of shareholders can impose their will on the majority of shareholders, simply because the others did not show up?

 

In fact, as I understand it, it could take only 30% of BS&T shares for Neal & Massy to get acceptance fortheir amalgamation proposal which values BS&T shares at $5.50. Why? Because, if my understanding is correct, the two-thirds majority needed for approval is tallied from the number of shareholders voting at the special meeting, either in person or by proxy, and not the total number of shareholders in existence at the time.

 

BS&T has thousands of shareholders, and it is my understanding from a good source that historically many of them never go to shareholder meetings. Could Neal & Massy be relying on a low turn-out in order to win an “election” that would give them Barbados’ largest corporation on a platter, and at a discount price to boot? Is that what Tony King calls “the most democratic of all approaches”?

 

At present, a court injunction brought by two BS&T shareholders is preventing BS&T directors from convening a special shareholders’ meeting to vote for or against the amalgamation of BS&T into Neal & Massy. Sooner or later that injunction will be lifted and the meeting will take place. If the amalgamation is approved BS&T will cease to exist as an autonomous company.

 

A two-thirds majority of shareholders present in person or by proxy is required to approve the amalgamation. Traditionally, the number of shares voted at shareholders’ meeting is low – less than half, I was told by a current BS&T director. If that director is correct that no more than 45% of shareholders’ votes might be cast, Neal & Massy could achieve their goal withonly 30% of the total BS&T votes being cast.

 

Does Neal & Massy have 30% of the total BS&T votes? They own 23% themselves. The same BS&T director said Neal & Massy also carries the proxy votes of some other Trinidadian shareholders, which probably gets them up to around 28% of total votes, by my guesstimate. So, all it will take for Neal & Massy to succeed is one other substantial shareholder to vote with them.

 

Which other substantial shareholder can Neal & Massy count on? Any from Barbados? The BS&T Board of Directors has deemed the Neal & Massy $5.50 proposal to be fair and has recommended it be accepted by BS&T shareholders. The Trustees of the BS&T Pension Scheme are mostly current or past BS&T directors or senior management. If BS&T Pension Scheme Trustees decide to vote their 3.6% shareholding with Neal & Massy, Neal & Massy could have enough votes at a low-attendance meeting to acquire all of BS&T shares at the discounted price of $5.50.

 

To prevent this aggressive method of takeover from succeeding, the other BS&T shareholders must ensure that their votes are cast against the Neal & Massy amalgamation. Those shareholders must attend the next special meeting in person to vote against the amalgamation or else give their proxy vote to someone who will vote against it.


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Dated: July 9th 2007
Island Properties Limited

 

Colin Brewer and I recently formed a Barbadian consortium to help defend the Barbados Shipping & Trading Company from amalgamation/ takeover attempts by Neal & Massy and Ansa McAl. Part of our defense involves offering $7.50 per share on the Barbados Stock Exchange. In an article in the Sunday Sun July 8, 2007 Sir Allan Fields, present chairman and former CEO of BS&T, is quoted as saying that our offer of $7.50 per share “cannot be construed as an offer to buy Barbados Shipping & Trading”.

 

Sir Allan is correct – we do NOT want to purchase ALL of the shares of BS&T. That would make us no different than the two Trinidadian conglomerates, Neal & Massy and Ansa McAl, who are attempting to take over BS&T at prices below its net book value, and make it into another subsidiary of these Trinidadian conglomerates.

 

No – our consortium wants to buy BS&T shares but only those currently owned by Neal & Massy. In principle we do not object to cross border ownership but we think this takeover attempt is offensive to BS&T shareholders, to BS&T’s Barbadian employees, pensioners, suppliers and contractors and to the Barbados economy.  BS&T is our largest public company and its unimpressive financial performance can be solved by new Barbadian directors and management. Neal & Massy has been involved in running BS&T for nearly 10 years and look how it has under performed. Do reasonable people think our largest public company will perform better when Neal & Massy owns all its shares and BS&T has become just another subsidiary? We did not own BS&T shares when the takeover attempt was announced but we were so offended that we decided to stand up and say no.

 

We aim to do 4 things:

 

1. We want like-minded shareholders to join us in blocking Neal & Massy’s attempt to amalgamate BS&T into their company. If you are a shareholder you must vote AGAINST this proposal or give your proxy to someone like us who will. Neal & Massy is dangerously close to having enough votes at the next meeting to force their minority-supported amalgamation proposal onto the majority of shareholders. If you do not vote this down it will be too late for BS&T.
2. If we and other shareholders succeed in blocking Neal & Massy’s amalgamation efforts our consortium is prepared to buy Neal & Massy’s 23% stake in BS&T at $7.50 per share. We are offering Neal & Massy a face-saving exit strategy which will result in them realizing a handsome profit from the sale of their BS&T shares.
3. On acquiring Neal & Massy’s shares in BS&T we will work together with like-minded shareholders to block any other takeover attempts.
4. Working with the other shareholders we will then install a new slate of directors at BS&T, directors with a wide range of business acumen, experience and entrepreneurial success.

 

We foresee that, as an autonomous Barbadian owned and managed entity, BS&T will continue to form strategic alliances and partnerships with other regional and extra regional companies so that BS&T’s business may expand profitably overseas and local shareholders and all stakeholders in BS&T may continue to enjoy its success.

 

If you agree with us but you are not a BS&T shareholder you can have a major impact on this struggle – make your objections known in public – newspapers, online, call-in programmes; call the managers of local institutions which own shares in BS&T and tell them to vote against the takeovers -  Sagicor mutual funds and Sagicor General Insurance, BS&T Pension Scheme, National Insurance Scheme, Fortress Caribbean Mutual Funds, BNB Pension Scheme, BNB Mutual Funds, UWI, Roybar Investment Corp.

 

Do not depend on the Barbados government to intervene and stop these takeover attempts – the government cannot do so unless Fair Trading Commission laws are contravened. Obviously, you cannot depend on BS&T’s present Board of Directors to stop the takeovers – they’ve already agreed that it is “advisable and fair and ...in the best interest of BS&T and its shareholders” to accept Neal & Massy’s $5.50 per share offer in spite of the fact that BS&T’s unaudited accounts at March 31, 2007 show that net asset value is around $7.88 per share.

 

No, this fight will be won by Barbadians, shareholders and others, making their voices heard. We know it’s an uphill battle; we feel like David versus Goliath (or in this case Goliaths). But we believe this is too important an issue for us to remain passive and uncommitted.

 

Tony Hoyos

Island Properties Limited

418-0514/ 256-5427


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UPDATE…UPDATE… Dated: July 4th 2007

Within a few days we will have successfully bid the traded price of BS&T shares on the Barbados Stock Exchange up to B$7.50, from their last traded price of B$5.50. This is in keeping with our stated intention on our website (www.iplbarbados.com) to offer $7.50 per share to any shareholder who wants to sell, especially the Neal & Massy Group.

Therefore, we will have achieved our first goal, which was to raise the trading price of the BS&T shares on the Stock Exchange. The new price will be slightly in excess of BS&T’s most recently published book value per share.

In our opinion we have now set the floor price for BS&T shares.

A few weeks ago Neal & Massy offered to amalgamate BS&T into Neal & Massy in a share swap which effectively valued the BS&T shares at $5.50. This price was approved by the Boards of Directors of both companies. However, we considered this price to be far too low.

We also believed that BS&T was undervalued, mainly because of lackluster stewardship of the company over many years by its Board of Directors and management.

In our opinion BS&T does not need to change its ownership by forcing its present shareholders to sell to Neal & Massy or anyone else. Instead we believe that a change of BS&T’s directors and the introduction of more entrepreneurial management, plus the formulation of an aggressive, new business strategy is what BS&T really needs – for everyone’s benefit. BS&T can, and should, remain a Barbadian entity.

Our local consortium’s aims continue to be:
(a) to provide a rallying point for persons who object to a takeover of BS&T
(b) to act as proxy for any BS&T shareholders who want to block a forced amalgamation with Neal & Massy or a takeover by Ansa McAl
(c) to offer to purchase Neal & Massy’s shares in BS&T at $7.50, which would afford them a handsome profit on their investment
(d) to consider whether to bid for all of BS&T shares in the event that Neal & Massy or Ansa McAL or any other company pursues a takeover bid of BS&T.



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Island Properties Limited forms Consortium to invest in BS&T

Dated: July 2nd 2007

Introduction

We are Barbadians -Tony Hoyos and Colin Brewer - and the co-owners of Island Properties Limited, a real estate development and property owning group which also owns and operates The Plantation Theatre and Aqua Restaurant & Lounge.

Recently Neal & Massy Holdings Limited, a Trinidad-based conglomerate, proposed an amalgamation with Barbados Shipping & Trading Limited, a Barbados-based conglomerate. Ansa McAl, another Trinidad company, then announced that it would soon make a cash take over offer for BS&T.

We are not opposed to foreign ownership or cross border trade in any way. Indeed we believe it is often vital for large companies to seek investment and business opportunities outside their home markets. In fact we believe that this has been one of BS&T’s principal failings – failing to expand their business profitably into overseas markets.

However, we do not think that a takeover of BS&T by either of these Trinidadian companies would be in the best interests of BS&T shareholders, or its other stakeholders, or Barbados. We are therefore forming a consortium of like-minded Barbadian business interests to block these takeover attempts and then to set BS&T on a path towards maximizing its potential. We have recently discussed this with many experienced local businessmen who own and/or manage privately held and publicly owned companies and we are greatly encouraged by the level of moral and financial support we have received.

Why do we oppose the amalgamation/ takeover attempts by the two Trinidadian conglomerates?

1. The prices offered are too low.

The most recent published financial statements for the 6 months ended March 31, 2007 show that the net book value of BS&T shares is $7.34.

Under N&M’s proposed amalgamation BS&T shareholders would receive 1 N&M share for every 2.75 BS&T shares. At N&M’s recent share price of TT$45.40 on the Trinidad Stock Exchange this offer values each BS&T share at Bds $5.50.

The cash offer price indicated by Ans McAl is $7.00, still less than net book value.

We believe the true economic value of the shares is considerably in excess of the book value with the development of an aggressive business plan and strong management.

2. There are no other benefits arising from the merger(s) which would not be available to BS&T if it were to remain an autonomous entity, so long as changes are made at Board and senior management levels.

A considerable number of BS&T shareholders have expressed the view that for many years BS&T’s management has not achieved satisfactory earnings on the group’s assets. We agree that BS&T’s financial results would benefit from a more entrepreneurial management approach.
We disagree that this type of management can be provided only by a Trinidadian (or other foreign) conglomerate. We believe that such managerial talent is available in Barbados.

N&M have already had effective management control of BS&T for 8 years, without improving its earnings record. Does anyone really believe that they can now accomplish this if they own 100% of BS&T’s shares? If they could have, they would have and should have done so before. Maybe then BS&T would not be trading at nearly $2 below its net asset value.

Additionally, if either Trinidadian company’s takeover bid succeeds, then BS&T’s central mind and management will move out of Barbados and BS&T will become just another subsidiary of a Trinidad conglomerate, with the likely result over time that other stakeholders in BS&T – staff, pensioners, third party Barbadian contractors and suppliers to BS&T – will be adversely affected.

In our opinion, a major cause of BS&T’s continuing poor financial performance is the composition of its Board of Directors, most of whom are full time employees of BS&T. The BS&T Board does not now, and never did, include enough independent local, successful entrepreneurs who could provide objective financial guidance and advice. In our opinion BS&T urgently needs a Board comprising such individuals - drawn from the widest business spectrum in Barbados, with the breadth of experience and the independence of mind to guide this major business conglomerate toward a new powerful strategy, to effect aggressive change in the Group, to forge a cohesive identity for the Group and achieve growth by acquisitions outside Barbados.

What can be done by Barbadians?

If, like many other Barbadians, you oppose a takeover of BS&T by either N&M or Ansa McAl then make your voice heard and your vote count. An effective voting bloc needs to be formed to say no to any proposed merger or takeover.

N&M’s amalgamation proposal needs only a two-thirds majority of voting shares present (including proxies) at the shareholders’ special meeting in order to be passed.  In practice, because many shareholders do not attend or send in proxies, we estimate that N&M could achieve a two thirds majority with only 30% of the total shareholding - and N&M already owns 23% of the total shares and has proxies from many other Trinidadian shareholders.

At the next special meeting (likely in August ) to approve either or N&M or Ansa McAl offers, N&M could be on the verge of forcing their amalgamation proposal onto the majority of BS&T shareholders. Since Ansa McAl’s offer is not yet published we do not know the details of their offer - but the greater the “no” vote by Barbadians the greater are BS&T’s chances of remaining autonomous.

Therefore if you own BS&T shares you need to plan to attend the meeting and vote against the proposals, or else give your proxy to someone who will.

If you don’t own BS&T shares but have a beneficial interest or ownership in the following large BS&T shareholders then make your opposition to the takeover bids known to the managers of these organizations and ask them to vote against the proposals

1. Sagicor Corp.- Equity Fund, Select Growth Fund or Global Balanced Fund
2. Sagicor General Insurance
3. BS&T Pension Scheme
4. National Insurance Scheme
5. Fortress Caribbean Mutual Funds – Caribbean Growth Fund or Caribbean Property Fund
6. BNB Pension Scheme or BNB Capital Growth Fund
7. UWI
8. Roybar Investment Corp. 

Only by Barbadians becoming activist shareholders can the will of the majority to block the takeovers be accomplished.

What does the Island Properties Limited consortium plan to do?

1. We will act as a limited proxy for any BS&T shareholders who wish us to vote their shares in opposition to the takeover proposals. Just complete, sign and send us your proxy. This will allow us to work together to create a solid voting bloc which can ensure the offer from N&M is defeated and that new directors are appointed who can formulate a new business strategy and plan, including the hiring of some new entrepreneurial managers.

2. Beginning in the first week of July our consortium will bid (subject to Stock Exchange rules) to purchase 1,000,000 BS&T shares on the Stock Exchange at $7.50 per share - offering a better price than either Trinidadian conglomerate. If this bid is fully subscribed we will bid for another million shares at the same price - and we will continue to do this in order to amass a significant share interest in BS&T. However, we really don’t want Barbadians to sell us their shares (unless you need the cash right now) – we prefer you to keep your shares and through the combined voting power of your shares and those of our consortium we will be able to block these takeover attempts. We would be happy if one outcome is that N&M sell us their 23% holding when they realize that their amalgamation attempts and those of Ansa McAl will be permanently blocked by individual shareholders acting together.

3. In due course, after the Ansa McAl offer is published, our consortium will examine the situation and the offers on the table to see whether we should bid for all the shares ourselves. As we said before, we aren’t pursuing a full scale 100% buyout yet because we don’t want Barbadians to sell us their shares; instead we want them to work with us implementing the changes needed at BS&T to enable it to perform at its maximum potential, so that shareholders and all other stakeholders are satisfied, while the company remains autonomous.

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