Susan Gordon, Business Reporter

Donovan Lewis ... the majority owner of Salada Foods. - File

The price of Salada's stock may have drifted downward on the Jamaica Stock Exchange this week. It closed yesterday at $90, a decline of $25, but its mostly sharp climb in recent weeks has mystified the market, not the least of whom is the major shareholder, Donovan Lewis.

"As far as I am concerned, it is speculative,"Lewis told the Financial Gleaner yesterday.

"I don't know who is buying. Perhaps someone is trying to acquire a particular amount of the shares and wanting to buy it at any price," he added.

The stock reached $135 on Tuesday before it began a southward drift.

Lewis, mostly through the investment vehicle, Three Bears Ltd, owns 62.3 per cent of Salada, most of which he acquired late in 2006 at less than a third of what it has traded over the past month. Salada has approximately 10.4 million shares outstanding.

Under the stock exchange rules, having reached the 50 per cent ownership threshold, Lewis was forced mid last year, to make an offer for all of Salada's outstanding shares. He offered stockholders $25.82 per unit.

Takeover bid

But then the brokerage house, Mayberry Investments, launched its own takeover bid, as high as $40.08 for each stock. With Lewis at the time insisting that he would not sell, Mayberry's bid was doomed from the start.

But yesterday, the company's CEO, Gary Peart, suggested that the recent upward spiral of Salada's price had vindicated Mayberry's assumptions.

"We saw value in the stock and that's why we made the bid," he said.

In the year to September 2007, Salada, which owns the Mountain Peak brand, reported net profit of $68 million - nearly double the $36 million made in 2006 - on revenues of $343 million reported in September 2007. Its net assets were valued on the balance sheet at $286 million, the majority held in cash and near cash.

But despite the activity in the Salada stock, Lewis said that he is keeping out of the market, as he promised after his last big acquisition.

"But I have given an undertaking that I will not buy and we haven't bought any shares apart from the large block we've taken up," he said.