The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The FREE National Movement’s (FNM) chairman has criticised the Government for mandating that only a 15 per cent stake in Bahamas Food Services (BFS) be sold to the Bahamian public, telling Tribune Business any initial public offering (IPO) should involve at least 25-30 per cent of the company’s equity.

Despite suggesting that the Christie administration should have required more of BFS’s share capital to be placed in Bahamian hands, as a condition for approving the company’s purchase by multi-billion US giant Sysco, Darron Cash nevertheless praised the eventual IPO as a step in the right direction.

“It’s good that there is at least some final decision on the matter,” he told Tribune Business. “I think it’s regrettable that they only went as far as 15 per cent to Bahamians, but at least that is a step in the right direction. It should have been 25 or 30 per cent, but at least a decision has been made,” said Mr Cash.

While no purchase price has been disclosed, Sysco, a company with $39 billion in annual sales, is set to take over BFS, the country’s largest food distributor. It is thought, though, that BFS is valued at between $90-$100 million, making the potential IPO worth around $12-$15 million.

Prime Minister Perry Christie recently confirmed that the Government had decided to approve Bahamas Food Services’ (BFS) takeover by Sysco, promising his administration would ensure that Bahamian wholesalers were not “unduly impacted” by the sale.

The overriding fear of Bahamian wholesalers is that Sysco could use its economies of scale and pricing power to undercut them and drive them out of the market, seizing all the business for itself.

Tribune Business exclusively revealed the BFS/Sysco acquisition plans earlier this year. Sysco had initially expressed interest in BFS back in 2004-2005. The initial deal, which was mulled under the first Christie administration, never came to fruition, partly because the Government was reluctant to grant approval for it in an industry supposedly reserved for 100 per cent Bahamian ownership only.