McCashin's Brewery has acquired an option to buy almost 20 per cent of food and beverage investor Veritas Investments at more than twice the recent market price.
Interests connected with former Veritas chief executive Michael Morton have agreed to sell 8.6 million shares in the business – almost 19.9 per cent – to 660 Main Road Stoke, which trades as McCashin's.
The transaction is in the form of an option that expires at the close of trading on March 29. The option, dated today, requires a $50,000 deposit be paid within five days of the option being executed. That sum will then be deducted from the 20 cents-per-share, or $1.7 million, purchase price.
Veritas shares were trading at 9 cents each before the option was disclosed through NZX. They rose 11 per cent to 10 cents, taking their gain the past year to 78 per cent.
Auckland-based Veritas is focusing on its bars and hospitality offerings, having sold out in the past two years from disastrous forays into the Mad Butcher and Nosh grocery businesses. Veritas paid $40 million for the meat retailer in 2013 and sold the franchise for just $8 million last year and had faced pressure from its former banker, ANZ, for repayment of $27 million in loans before resetting as a smaller, hospitality-focused company.
In 2014 it acquired the Better Bar Company, which describes itself as the country's leading Irish and gastro pub operator, with eight sites in Auckland. At the end of the month, shareholders will be asked to approve the $2.7 million purchase of the Citizen Park pub in Kingsland.
Nelson-based McCashins was at the forefront of New Zealand's fledgling craft beer industry in the 1980s. Its Mac's beer business was sold to Lion in 1999, but the family started afresh and now make Stoke beer and Rochdale cider.
Morton, who will retain a 15.7 per cent interest if McCashin's exercises its option, bought the Mad Butcher operation back from Veritas last year.