Susan Gordon, Business Reporter

Kevin Donaldson, Justin Nam - File

The Board of directors of Salada Foods Jamaica Limited Jamaica advised its shareholders to exercise caution in their take-up of Mayberry's new offer of $40.08 per stock unit, saying those planning to do so should sell only as a last resort.

The directors, who said their opinion was based on business judgement, concluded that stock-holders whose investment objective is long term should incline towards holding rather than accepting Mayberry's offer as the medium- and long-term outlook for the company is positive.

Not sustainable

It said the market for the company's stock is thin and that the price level seen on the Jamaican stock market over the last week is not sustainable in a normalised market.

The stock traded at $70 on Friday. Mayberry Investments Limited is offering $40.08 per share, up from its previous $32.50. The stock did not trade on Monday or Tuesday.

Assistant vice-president of equity trading and relationships at First Global Financial Services Limited, Justin Nam, believes the current market price is unsustainable, noting that the rapid hike was a concern, but he also told Wednesday Business that the Mayberry offer was low.

"So, if you need your money, maybe you could sell at $40.08 which is still below the last trading price," was Nam's take. "The offer is on a whole still a little bit too low the stock has been improving bit by bit."

'Last resort'

Investment analyst at Pan Caribbean Financial Services, Kevin Donaldson, appeared to agree with the Salada board, saying he would try to sell at the current market value, $65 to $70.

"The stock has a float of 10 million shares, the majority of which are held by institutions which means it is not trading and lack of trading may lead to it being not fairly priced," he said. "I would consider the offer a last resort."

But Mark Croskery, president and chief executive officer of Stocks and Securities Limited (SSL), repeated a position expressed last week that the stock price would remain at current highs.

"We disagree that the share price is not sustainable at $ 60 to $70," he said. "We think that the share price, even though the bids are weak, will remain in the $60 to $70 range as current buyers do not have their bids in the cue and we will await the next quarter's results."

susan.gordon@gleanerjm.com