Comvita target of $70m takeover

Cerebos Gregg's, a household name in coffee, sauces, salt and spices, has today launched a $70 million takeover bid of natural health products company Comvita New Zealand.

A co-owner of Dominion Salt at Mount Maunganui, Cerebos Gregg's told the New Zealand Stock Exchange and Paengaroa-based Comvita it wants to take full ownership, offering $2.50 a share to existing shareholders.

The surprise offer has a built-in 19 per cent premium on Comvita's closing price yesterday of $2.10 a share. In mid-September Comvita, one of the Bay's leading companies, upgraded its profit estimate for the year ending March 2012 to about $8 million on sales of more than $90 million, and its share price jumped from $1.75.

Around that time Cerebos Gregg's executives were completing their final inspection of Comvita, having visited the business from Sydney. The offer is conditional on 90 per cent acceptance by Comvita shareholders.

Cerebos Gregg's has said Comvita would be delisted from the sharemarket but its main office and manufacturing operations would remain in the Western Bay.

Cerebos Gregg's chairman Trevor Kerr said the company had a long-term view of Comvita and would focus on sales growth and achieving higher value for its manuka honey. "We will invest in research and development, and assist in sales and marketing in Asia where Comvita brands are not yet well established," he said.

Cerebos Gregg's has been a 50 per cent owner of Dominion Salt for 40 years.

Comvita, which employs 330 people here and overseas, manufactures and distributes manuka honey, health supplements, olive leaf, skincare and woundcare products. It exports to Australia, South East Asia, Japan, Britain and North America.