Leading New Zealand manuka honey producer, Comvita, has become a potential takeover target following a slide into loss-making in the first half of financial year 2023-2024.
In its statement on its latest results to the NZ Stock Exchange, the company reported a net loss of $NZ3.2million.
The result came on the back of a dip in sales with total revenue for the half, down some 12%.
Lower sales in both China and the US were said to be mainly responsible.
Takeover speculation has been growing in the wake of the results, and especially since the company’s recent notification to the NZSX that it had received a ‘Non-binding indicative offer.”
A statement to the NZSX released on 22nd February said that the offer was both unsolicited highly-conditional.
No details were provided as who has made the offer.
But there are a number of obvious candidates, and particularly given that the putative buyers have indicated any takeover would be via a scheme of arrangement.
The scheme of arrangement approach is favoured by merchant banks, venture capitalists hedge fund operators and the like.
It was, for example the approach adopted by the merchant bankers who privatized Australia’s Capilano honey and re-badged it as Health and Wellness.
So too, NZ Manuka Health, the no.2 player the NZ Manuka honey market was taken over in a scheme of arrangement by South-East Asian based Chinese interests.
Schemes of arrangement attract less intensive scrutiny than a public takeover, and enable the buyers to devise complicated transactions terms and conditions that can disguise substantial cash-grabs, or debt-load ups.
Certainly, Chinese interests are very likely to be interested in the company, should it be on the market, because more than 60% of the company’s revenues come from China.
Comvita’s manuka honeys and related products are also popular in South East Asia.
And just last year the company bought Singapore specialist honey retailer – Honeyworld- for a reported price in excess of $10million.
Honeyworld operates some 18 retail outlets across Singapore and provided some small measure of good news for Comvita in the last half of the year.
It contributed some $NZ6.8million in revenue, without which Comvita’s overall revenue performance would have been even more disappointing in the half year.
For more information go to www.comvita.co.nz