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Twists and turns continue as Capilano Honey (ASX: CZZ) prepares to sell to a China-focused private equity group.
The honey producer this morning announced it has received support from foundation shareholder Capilano Beekeepers Limited to go ahead with the sale to Wattle Hill.
The transaction, worth $190 million, would see 100% of the shares in Capilano sold to Bravo BidCo and Bravo HoldCo (entities owned by Wattle Hill and ROC Capital).
Wattle Hill, co-founded by Albert Tse, the husband of Jessica Rudd, daughter of former Prime Minister Kevin Rudd, specialises in China-focused agricultural exports.
The company's CEO Dr Ben McKee spoke to 3AW's Ross Greenwood this morning, emphasising the importance of maintaining Capilano as an Australian business.
"The soul of our company is Australian beekeepers and Australian honey," says McKee, adding that it was "very important" that stakeholders were "protected" in the deal.
Despite this seemingly good news for the company, the honey producer has been hit with a whirlwind of developments in just the last week, casting doubt over the transaction.
Last night, Kerry Stokes, the controlling shareholder in Capilano, increased his stake in the business.
Previously, Stokes held 1.95 million shares in Capilano, representing 20.6 per cent of voting power in the company. Overnight, Stokes increased his share to 2 million shares, representing 21.7 per cent of voting power.
This follows last week's development which revealed Bega Cheese lifted its stake in the Honey producer to 5.76 per cent, indicating a potential bidding war.
In the background is an ongoing development regarding allegations made against Capilano that it was selling fake honey.
Last week, Capilano slammed media reports from the Sydney Morning Herald and the ABC that it may be unwittingly selling fake honey after nuclear magnetic resonance (NMR) testing revealed that Allowrie's Mixed Blossom Honey was 'adulterated' in a majority of samples.
McKee has blasted the reports, arguing that the company uses 'validated internationally recognised testing of honey to determine authenticity' on every batch of imported honey.
However, as reported by The Australian, the SMH and the ABC failed to disclose a crucial fact; the law firm that commissioned the report on the fake honey was acting separately Roc Partners and Wattle Hill.
Shares in Capilano Honey are down 0.33 per cent to $21.21 per share at 10.10am AEST.
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