The cornerstone shareholder, Li Wang, said her family were long-term supporters of Comvita, having established the market in China for the company.<\/p>\n
The takeover tangle comes as the m\u0101nuka honey industry struggles with oversupply and aggressive discounting.<\/p>\n
Comvita\u2019s last result showed it sank deeper into the red with a loss of $104.8m from $77.4m a year earlier.<\/p>\n
Wang, who is a New Zealand citizen, said in a statement the family did not believe the current management team could turn around the company\u2019s performance.<\/p>\n
\u201cAny delay to a resolution on Comvita\u2019s ownership structure will irreplaceably damage the brand that has been built up over decades and put several hundred jobs at risk in New Zealand and overseas,\u201d she said.<\/p>\n
\u201cI support the bid by Florenz as it offers the highest value for all shareholders at the moment and they have a solid track record to improve Comvita for the good of New Zealand and the m\u0101nuka honey industry, which relies on thriving international business,\u201d Wang said.<\/p>\n
\u201cI would of course welcome any bona fide party that can come up with a higher offer,\u201d she said.<\/p>\n
\u201cShould the current bid by Florenz fail, and no higher bid emerges, I believe the Comvita management and board will seek to conduct a highly dilutive capital raising and\/or take on high-interest subordinated debt, which may further worsen the operating cashflow.\u201d<\/p>\n
Wang said the business falling into the hands of receivers was a \u201cdistinct possibility\u201d, particularly if operations in China did not rapidly improve.<\/p>\n
\u201cAny such actions like highly dilutive capital raising and\/or high-interest subordinated debt, will be value-destructive for all existing shareholders, including myself,\u201d she said.<\/p>\n
Wang said she was \u201cdisturbed\u201d to learn that a few shareholders and people formerly involved with Comvita have expressed negative views on the Florenz bid.<\/p>\n
\u201cI would encourage that they come up with a higher offer for all shareholders, instead of looking to take advantage of the situation at the expense of other shareholders and the company.\u201d<\/p>\n
Wang said the current board and management were \u201con a tight leash\u201d from the company\u2019s banking syndicate \u201cafter years of poor decision-making, profit downgrades [and] sales down while costly inventory piles up\u201d.<\/p>\n
In 2016, Bougen sold down his stake<\/a> in the then high-flying company for just over $12m.<\/p>\n Wang said the company had been in a downward spiral since the sell-down.<\/p>\n She pointed out the board of Comvita unanimously supported the Florenz bid.<\/p>\n \u201cThere can be no question that in the absence of a superior offer the Florenz bid is the best opportunity shareholders have to recoup at least some of their investment,\u201d Wang said.<\/p>\n Comvita was founded by the late Claude Stratford<\/a> in 1974.<\/p>\n Bougen became Stratford\u2019s business partner two years later.<\/p>\n