According to Grupo Rey, "the acquisition will be executed through a public offering to purchase shares (OPA) on the Panama Stock Exchange, where Corporación Favorita undertakes to acquire at least 60% of the total issued ordinary shares in circulation of Grupo Rey."
- P. Morgan acted as financial adviser to Grupo Rey and Arias, Fábrega & Fábrega and Simpson Thacher & Bartlett were legal advisers to the company.
Although Corporación Favorita was financially advised by Proventus and Lexvalor Abogados and Icaza, González-Ruiz & Alemán participated as their legal advisers.
Interview with Mr Alexis V. Herrera Jr. and Mr Luis Chalhoub from Icaza, Gonzalez-Ruiz and Aleman
Please tell me about your involvement in the deal?
We were involved in the transaction from the start. Our services included accomplishing the legal due diligence of Grupo Rey (i.e. Rey Holdings, Corp. as well as its subsidiaries and affiliates). In addition, we provided legal advice during the negotiation of the share purchase agreement with the majority shareholders and all of its ancillary documents on behalf of Corporacion Favorita C.A. Furthermore, we advised Corporacion Favorita C.A. throughout the process of the public tender offer, filed the documents with the securities regulator the Superintendency of Banks of Panama and remained involved with the legal aspects until the closing of the transaction. Our services included the drafting and/or revision of all the agreements and other documents, including without limitation the prospectus, related to the transaction. Our team was led by Luis Chalhoub and Alexis V. Herrera Jr.
Why is this a good deal for all involved?
It is a good deal because the sellers received good money for their shares and several of them continued being shareholders of the company sold. In addition, the new controlling shareholders have vast experience in the same business within the region and will add value. New investments and other measures are expected to improve the efficiency of Grupo Rey and eventually, increase profitability.
What challenges arose? How did you navigate them?
This transaction had several challenges. The most important one is that there had not been a public tender offer in our country in 10 years. Thus, there were a few hurdles that affected the transaction from a practical/regulatory perspective that involved a joint effort among the parties of the transaction and the regulator. The complexity of the transaction was substantial considering that there was a put/call option agreement affecting the buyer and all the shareholders of Rey Holdings, Corp. In addition, there were two guarantee trusts: one to cover contingent liabilities in favour of the buyer and the other to cover contingent assets in favour of the sellers. To put all the different pieces together required a lot of work and coordination with the relevant parties, always taking into consideration the underlying regulation and the regulator’s perspective.
