A Bahamian investor group last night said it had completed its purchase of a 78 per cent stake in Bahamas Supermarkets, the company that operates the City Markets stores, at a total cost of $56 million.
The deal, which is thought to be the largest buyout for a non-hotel business in the Bahamas, will see BSL Holdings take over majority ownership of the 12-store chain, which operates in Nassau and Freeport, from US grocery retailer Winn-Dixie.
Winn-Dixie will receive $54 million for its stake in Bahamas Supermarkets, with the remaining $2 million related to transaction costs, including legal and corporate advisory fees.
BSL Holdings’ Board has as its chairman, J Barrie Farrington, Kerzner International’s executive vice-president of administration. Two other directors are businessman Franklyn Butler and Anwer Sunderji, chairman and chief executive of Fidelity Merchant Bank & Trust, which structured the transaction and formed BSL Holdings as a buyout group.
The last two Board members are G. Anthony King and Frere Delmas, representatives of Barbados Shipping & Trading, which will act as Bahamas Supermarkets’ operating and management partner. It is a major food retailer in Barbados.
The five BSL Holdings directors will now sit on the Bahamas Supermarkets Board along with Hugh Sands, who will remain as chairman.
Mr Sunderji said previously: “There are no plans to do anything dramatically different. Don’t try to fix what is not broken. It’ll be business as usual. There are no fundamental changes that are likely to take place. It’s steady as she goes. Nothing is going to change.”
The transaction’s completion thus brings to an end an almost 10-month saga, which began when Winn-Dixie decided to put its Bahamian retail chain up far sale last September.
Bahamas Supermarkets was viewed as a non-core operation by Winn-Dixie, and the $54 million raised from the sale is key to helping it emerge from Chapter 11 bankruptcy in the US.
BSL Holdings won the New York auction for Bahamas Supermarkets in March, outbidding rival Bahamian investor group, BK Foods, which had triggered the bidding war with an offer of $50 million for the company.
BK Foods decided not to increase its offer to match the $54 million offered by BSL Holdings, This was because it believed any higher offer would overvalue the company.
BK Foods’ principals were RND Holdings chairman Jerome Fitzgerald, entrepreneur Mark Finlayson and ex-Burns House chief financial officer Philip Kemp.
BK Foods will now collect a $1 million break-up fee from WinnDixie as well as regain its $5 million deposit.
BSL Holdings’ shareholders include rival food retailer, Abaco Markets, which holds a 10 per cent stake in the buyout group Other investors include Abaco Markets chairman and chief exe utive, Craig Symonette, and fellow shareholders Frank Crothers and Mr Butler. Bahamian pension funds are also among the investors.
Observers of the Bahamas Supermarkets transaction are likely to view the deal’s completion as clearing the way for the company to begin merger talks with Abaco Markets, something most view as a logical outcome to developments.
The $56 million transaction is understood to have been funded by a combination of $15 million in equity; an $10 million unsecured loan from Barbados Shipping & Trading; $5 million in preference shares; and $26 million in commercial bank debt.
By NEIL HARTNELL, Tribune Business Editor
