Cable & Wireless ‘Amalgamation’ and Lack of an Operational Barbados Stock Market
Submitted by Crusoe
The Nation news reports that C&W is seeking to purchase all remaining shares in the company, from minority shareholders ”Under the proposed amalgamation, shareholders will surrender their shares in Cable & Wireless Barbados in exchange for a cash payment of BBD$2.86 for each common share.”
For a company that has not paid a dividend for years, yet made substantial profits, how can such a low share price be substantiated?
Surely the FSC should examine the calculations supporting such a share price, including the expected future earnings potential of the shares, as a share price should be calculated.
That C&W Barbados has not paid a dividend in years would, while making profits, is shocking, would surely not be allowed by shareholders in North America (the directors would have been roasted, as NA shareholders in any company expect a dividend every quarter) and this ridiculously low share price merely adds insult to injury.
What exactly is the FSC in Barbados doing to protect minority shareholders?
This event adds credence to the assertion that there is no real stock market in Barbados, that any semblance of such is a veneer, with no real possibility of small shareholders earning via dividends or share appreciation. Add to this, that profitable companies locally are mostly privately owned and the whole thing becomes a joke.
If one believes that assertion and I do, then the conclusion is that Barbadian citizens should be allowed to invest in international stock markets, to have every opportunity that others have. Handcuffing Barbadians in using their earned income to invest is idiocy. Government policy on investments, limitations on overseas investment, is nonsense and needs to change.
There is not and will never be a viable stock market in Barbados.