PanJam, JP Group complete $110-b deal
Jamaica Producers Group Limited (JP Group) and PanJam Investment Limited successfully completed the $110-billion amalgamation transaction on Friday.
The deal saw JP Group transfer its ordinary shares in intermediate holding company JP Global Holdings Limited to PanJam in exchange for JP Group being issued ordinary shares in PanJam equivalent to 34.5 per cent of the issued share capital. JP Global Holdings held the operating assets of the JP Group minus any retained assets and liabilities. JP Global’s total assets as of October 1 was $44.29 billion with equity of $34.81 billion, $17.55 billion being attributable to shareholders.
Based on PanJam’s last ordinary share count of 1,066,159,890 shares as per the Jamaica Stock Exchange’s (JSE’s) trade information, this translates to 561,565,133 ordinary shares issued to JP Group. This would value the shares at $29.82 billion based on Friday’s closing price of $53.11. PanJam closed the first quarter with a market capitalisation of $55.62 billion plus a best bid of $55.90 and best ask of $55.95.
“We are pleased to have completed this transaction which represents an important milestone for both companies. By combining our strengths and expertise, we are well-positioned to capitalise on new opportunities and create long-term value for our shareholders,” said newly appointed chief executive officer (CEO) of Pan Jamaica Group Limited Jeffrey Hall in the JSE disclosure.
PanJam is to be renamed Pan Jamaica Group Limited subject to the approval of the registrar of companies. Alan Buckland has been appointed the chief financial officer (CFO) of the Pan Jamaica Group with Eric Scott being given the new role of deputy CFO on April 1. Simone Pearson was appointed the General Counsel of the Pan Jamaica Group. JP Chairman Charles Johnston, Buckland, and Hall were appointed as directors to the PanJam board on April 1. Hall will also serve as the executive vice-chairman of the Pan Jamaica Group.
The new Pan Jamaica Group will not have St Lucian New Castle Company Limited in its corporate structure following the sale by PanJam in late December, but will include Belgian company The Juicy Group NV and HPP Belgium NV after the JP Group acquired it on March 21. PanJam sold its New Castle stake for $2.27 billion with a gain of $1.38 billion.
JP Group earned $29 billion in revenue and $3.99 billion in consolidated net profit for 2022 while PanJam earned $2.35 billion in income and $4.79 billion in consolidated net profit.
As part of the amalgamation, PanJam chairman Stephen Facey was appointed to the JP Group board on April 1. Dr Swee Chua was also appointed to the JP board on the same date. Dr Chua is Hall’s wife.
This means that both the JP and Pan Jamaica boards will have 12 directors each.
While the deal was finalised between both companies on Friday, the ordinary shares have not been converted into stock units as yet and registered on the JSE. Thus, the recognition of JP’s 34.5 per cent ownership stake in PanJam and PanJam’s asset base increasing are not immediately clear as yet. Both companies will be required to submit their first-quarter numbers by May 15. JP’s stock price closed at $21.91 on Friday with a best bid of $21.94 and best ask of $21.95.
Before the deal was consummated on March 31, the executives and directors of both companies were purchasing ordinary shares. A PanJam director exercised his stock options for 1,878,728 ordinary shares on March 8 while another exercised his options for 400,193 shares on March 31. A PanJam connected party also sold 4 million shares at $56.55 on March 8. Two JP Group directors purchased 1,513,386 shares and 696,326 shares in March as well.
“The successful amalgamation of JP and PanJam marks a significant milestone in our journey towards creating greater value for our stakeholders and driving sustainable economic growth for Jamaica. Together, we are poised to unlock new opportunities, harness collective strengths, and enhance our competitive edge, as we continue to pursue our vision of building a better, brighter future for Jamaica,” said newly appointed president of the Pan Jamaica Group Joanna Banks in the release.