The Tribune

By NEIL HARTNELL

Tribune Business Editor

Super Value’s president last night confirmed that capital expenditure “running into the millions” would be required to re-equip three of City Markets’ New Providence stores, telling Tribune Business that but for a “misunderstanding” related to government approvals the Cable Beach outlet could have been open this weekend.

Speaking to this newspaper from Florida, Rupert Roberts said Super Value’s offer for City Markets’ remaining business was “twice” what the latter’s assets and goodwill were worth, disclosing that the latter’s current 78 per cent majority shareholders, the Finlayson family, had asked for “two times’” its ultimate offer.

Revealing that Super Value had also made concessions, notably revising its initial proposal to pay the final 20 per cent balance on the purchase price one year after closing, Mr Roberts said he and the Finlaysons should seal their deal by this weekend.

While it would take two weeks to get what would be the ‘former’ City Markets outlet at Cable Beach open, Mr Roberts said the need to re-equip and refurbish the other three sites - Harbour Bay, Prince Charles (Seagrapes) and South Beach - meant it might be two months before they re-opened.

He revealed, though, that a “misunderstanding” over whether Super Value required Shop Licences from the Government for the new stores had delayed the process for re-opening them - an issue that has now been solved.

“We had a mishap and a misunderstanding,” Mr Roberts told Tribune Business, “because when the Finlayson family went to the Government, we understood they [the Government] wanted to seer the agreement for sale.

“They wanted to make sure there was a deal, and we misunderstood that to mean it went on hold until the Government approved it. But the Government was not saying that at all.”

One of the City Markets store landlords approached the Government on behalf of both supermarket chains, and Mr Roberts said that through him - and his own research - he realised that the new Business Licence Act, which aims to create an omnibus or ‘one stop shop’ process for licensing all businesses, had effectively replaced the Shop Licence Act.

“We have a Shop Licence. We pay just about $1 million a year for a Shop Licence. We have a Business Licence. The landlord came back from government and said: ‘You’re Bahamian. You have all the licences you need. Why not get the shops open?’

“I realised we had a misunderstanding, as we could have had the Cable Beach store open by this weekend, and the employees could have had two pay cheques.”

The situation regarding the other three New Providence-based stores is not quite as rosy. Mr Roberts criticised the Finlayson family’s ownership predecessors, the BSL Holdings group and its operating partners, Neal & Massy and Barbados Shipping & Trading, for failing to replace the outdated, aging refrigeration equipment they inherited.

“Three of them need re-equipping and refurbishing, and that’s going to run into the millions. If they had good equipment, and been up and running like Cable Beach, it [City Markets] would have been more valuable, but there’s going to be a delays and a lot of capital expenditure to get them up,” Mr Roberts told Tribune Business.

Engineers, draftsmen and the necessary equipment were set to arrive within the next week, and the Super Value president added: “We could have Cable Beach open in two weeks.

“We did place a foreign order, which should be in Nassau about now, and have inventory in our warehouse and the warehouses of local agencies. There’s a possibility we could pull Cable Beach off in two weeks.

“The earliest after that, the next one, will probably take two months, because we need to get the equipment in. There’s a six-week lead in to get it in and get it installed.”

Mark Finlayson, principal of his family’s Trans-Island Traders vehicle, which holds the 78 per cent stake in Bahamas Supermarkets, the operating parent of City Markets, told Tribune Business yesterday that the agreement with Super Value was now “with the lawyers”, and could be concluded as early as today.

Mr Roberts concurred, telling this newspaper: “As far as I’m concerned we have a gentleman’s agreement, and we’re pulling on that and doing a lot of business within that.

“I’m now putting money into that, treating it like a deposit, but by the weekend we should be all signed up. There’s a lot of detailed work and planning, but we have the machinery and men and women to pull it off. There’s so many details and loose ends you have to tie down.”

Recalling the origins of the deal between Super Value and the Finlaysons, Mr Roberts said: “This started out three weeks ago. I stopped at City Markets on Prince Charles, and could see it was all over.

“I spoke to the store manager, and said: ‘Look, I think it’s time to speak to the Finlayson family, because this is not going anywhere’. He gave me the numbers of Rae Finlayson and Nikki Boeuf. They said: ‘If you’re very serious, we’d like to meet with you’.

“I collected my daughter, Candy, and said: ‘Let’s meet with the Finlayson family’. We got together and found everyone was very serious, and we made an offer, which we upped slightly later on.”

Explaining the reason for doing so, Mr Roberts said: “What happened was the first offer said 20 per cent would be paid on the trail end, a year after getting the stores up and running. But they said they needed everything upfront to pay off the losses, so we agreed to pay it all upfront.

“They did ask for more. They asked for two times’ our offer. Sir ‘Tiger’ said they couldn’t sell for such a low price, but I pointed out that our offer was two times’ what the assets and goodwill were worth, and what we were really buying was the future. Mark and the family agreed to accept our offer.”

Dionisio D’Aguilar, AML Foods’ chairman, told this newspaper yesterday that he believed money was not the “underlying reason” that the Finlaysons had chosen Mr Roberts’ offer over the BISX-listed food retail group’s, but the Super Value president rejected thi¬¬s.

“I can’t speak for the Finlaysons, but I think they found our offer somewhat more attractive and more lucrative,” he added. “I’m sure that if AMLbid higher, theirs would have been accepted.”

Noting that Super Value had already been employing City Markets staff in its existing operations, Mr Roberts said the supermarket chain was in the process of “re-orienting” them to its own system and way of doing business.

“We’ve been interviewing for two weeks, and I urge anyone not interviewed by personnel to come and see Mrs Bridgette Knowles,” he told City Markets’ 200-300 employees.