JMMB, Cals slice up $150m Honey Bun shares

J MMB Securities and Cals Manufacturing separately acquired blocks of shares in Honey Bun Limited, putting them among the top 10 shareholders.

The transactions, combined, were valued at around $150 million.

The Chong family continues to hold the bulk of shares in the bakery company through holding company Next Incorporated, as well as personal holdings, including that of co-founders CEO Michelle Chong and Chairman Herbert Chong.

JMMB Securities Limited has become the fifth-largest shareholder with 11.7 million units, as at September 2021, followed by Cals Manufacturing at No. 6 with 6.64 million.

Cals Manufacturing, which started in 1999 with syrup as the core product, has expanded to become a full-scale food manufacturer led by Carlton Watson. The company’s name is derived from the acronym of Carlton, Annette and Lisa.

Neither JMMB nor Cals held shares sufficient in the June quarter to enter the top 10. The large block transactions occurred on August 26 with 11.8 million units trading at an average price of $8.01, and then 6.07 million units on September 27 at an average price of $8.59.

The sellers are unknown. However, within the July-September quarter, Next Incorporated sold 3.9 million units of its holdings, and Andrew Mahfood sold down at least 309,000 units of his 2.99 million units, exiting the top 10 list as a result.

Also, Mayberry Jamaican Equities Limited, MJE, which previously held 9.5 million shares, sold down its stake and exited the top 10 as well. Mayberry Managed Clients Account remains a top holder of shares. MJE and the managed accounts are controlled by Mayberry Investments.

MJE operates a fund that holds investments in many stocks and buys and sells shares on an ongoing basis. For instance, MJE disposed of US$503,000 worth of shares in Honey Bun during the quarter, which reflected its second-highest disposal during the period after disposing of US$933,000 worth of Lumber Depot, according to MJE’s financials. The company then acquired additional shares in Supreme Ventures worth US$9.4 million and additional GraceKennedy shares worth US$1.1 million as major additions over the period, the MJE financials explained.

Honey Bun has 471.26 million in issue. The HONBUN stock, listed on the junior market, traded down Thursday at $7.92 per share, valuing the bakery company at $3.7 billion. The stock is up 49 per cent year to date, putting it among the top performers in the market; whereas the overall market continues to recover from the pandemic fallout. The JSE Combined Index is down 0.23 per cent year to date.

With equity of $1 billion, Honey Bun is currently trading at more than three to four times its book value.

Honey Bun Top 10 shareholders at September 2021:

Next Incorporated: 262.45 million shares

Michelle Chong: 58.7 million shares

Herbert Chong: 54.1 million shares

Mayberry Managed Clients Account: 11.78 million shares

JMMB Securities: 11.7 million shares

Cals Manufacturing: 6.64 million shares

Sagicor Select Fund: 3.78 million shares

QWI Investments: 3.29 million shares

Kenneth Lyn: 2.78 million shares

Daniel Chong: 2.69 million shares

business@gleanerjm.com