Allen & Overy advises Trinidad based CL Financial Limited (CLF) on the sale of its approximately 81.4% stake in Jamaica conglomerate Lascelles deMercado (LdM) to Davide Campari-Milano S.P.A. (Campari).
The CLF interest in LdM was acquired by Campari through a formal public tender offer for 100% of LdM’s outstanding common and preferred shares. Under the terms of a lockup agreement executed by CLF and Campari in September, Campari paid a total purchase price of USD415 million (or USD4.32 for the ordinary units and USD0.57 for each of the 6% and 15% non-redeemable cumulative preference units) exclusive of certain extraordinary dividends.
Through the transaction, Campari acquired the LdM spirits desperado business, led by its rum range including the Appleton Estate, Appleton Special/White, Wray & Nephew and Coruba brands and a local distribution company. The acquisition of LdM was the third largest acquisition in Campari’s history, following the acquisitions of Wild Turkey and SKYY Vodka.
Prior to the closing of the tender offer transaction, LdM completed the process, which it began earlier this year, of divesting all non-core assets (principally, LdM’s insurance business, its transport assets and certain marketable securities in other companies). The divestiture of the non-core assets is designed to streamline LdM’s focus on its core rum business. Certain of these divested non-core assets were sold to third parties and others were contributed to a new trust company (Newco) formed solely for the purpose of holding the non-core assets in order that these can be marketed and sold to third parties or liquidated post-closing. The shares of Newco were distributed to the shareholders of LdM prior to the closing of the tender offer transaction.
As part of the transaction, the Company paid to shareholders extraordinary dividends of all LdM cash in excess of LdM’s indebtedness and net proceeds from the sale of certain non-core assets, including LdM insurance subsidiary Globe Holdings Limited. The first dividend of USD33.7 million was paid on August 31, 2012. The second dividend of approximately USD44.6 million was paid on November 28, 2012. The transaction includes a post-closing true up in respect of working capital, net cash and net proceeds from the sale of non-core assets and post-closing monies in respect of those adjustments are expected to be paid in the first or second quarter of 2013 to the LdM shareholders who held shares in LdM immediately prior to closing.
The transaction proceeds were used by CLF to fully repay the debt CL incurred in 2008 in connection with the LdM acquisition and the surplus returned to CLF will be used for other corporate purposes.
The A&O Team
The A&O team was led by partner Cathleen McLaughlin and senior counsel Nicole Perez, assisted by associates Christopher Kelly, Pascal Chahine, Giancarlo Sambalido. Antitrust advice was provided by senior counsel David Ernst and associate Desma Polydoru.
