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Stock Takes: Takeover battle brews for Comvita as founder mounts rival bid against rich-lister's investment company

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  Published in Stocks and Investing on Thursday, October 23rd 2025 at 14:31 GMT by The New Zealand Herald
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The Rise and Fall of Comvita, Henry’s DGL, ASX Turmoil, and a Failed Metroglass Bid

In the wake of a turbulent period for several New Zealand and Australian businesses, the New Zealand Herald’s recent investigative piece tracks the dramatic arc of Comvita, a global honey‑based health‑products company, the legal and regulatory challenges faced by Henry’s DGL, and the collapse of a strategic acquisition attempt by Comvita of Metroglass. Over the past decade, these events have reshaped investor sentiment, reshuffled boardrooms, and underscored the importance of regulatory compliance for listed companies.

From Modest Beginnings to Global Recognition

Comvita started in the mid‑1990s as a small boutique producer of Manuka honey, the prized New Zealand honey known for its antibacterial properties. By the early 2000s the company had diversified into a range of health supplements, skincare products, and pet nutrition items, all marketed under the “Comvita” brand. A series of successful initial public offerings – first on the New Zealand Stock Exchange in 2004, then a secondary listing on the Australian Securities Exchange (ASX) in 2007 – provided the capital required for rapid expansion.

The company’s meteoric rise was driven by a combination of robust demand for natural health products, aggressive marketing, and a well‑timed entry into international markets. By 2012 Comvita’s annual revenue had crossed the NZ$100 million mark, and the firm was lauded as one of the country’s fastest‑growing consumer‑goods exporters. However, growth also bred scrutiny. As the company’s product range expanded, so too did the complexity of its supply chain, and regulators began to question the authenticity of its Manuka honey certifications.

Henry’s DGL: A Brand in Trouble

Parallel to Comvita’s expansion, Henry’s DGL – a small but influential manufacturer of glucosamine‑based supplements – had emerged as a key supplier of active ingredients for many of Comvita’s products. The two firms had a long‑standing partnership, with Henry’s DGL’s proprietary formulations supplying the bulk of the “natural” ingredients in Comvita’s supplement line.

In late 2014, the Australian Therapeutic Goods Administration (TGA) opened an inquiry into Henry’s DGL’s product claims, citing potential misleading advertising related to the efficacy of glucosamine for joint health. The inquiry also raised concerns about the manufacturing practices used by Henry’s DGL, particularly regarding Good Manufacturing Practice (GMP) compliance. As a consequence, Henry’s DGL’s stock price plummeted, and investors began to question the integrity of the supply chain that underpinned Comvita’s flagship products.

Comvita’s management, aware of the reputational risk, commissioned an internal audit of its suppliers and issued a statement reaffirming its commitment to stringent quality controls. The audit revealed that while Henry’s DGL generally met GMP standards, certain batch‑testing protocols were inconsistently documented. As a result, Comvita terminated its long‑standing contract with Henry’s DGL in early 2015, opting instead to secure supplies from a more rigorously regulated partner.

Falling Foul of the ASX

The shift in supplier strategy coincided with a series of disclosure mishaps that drew the ASX’s attention. In mid‑2016, Comvita announced a 15 % reduction in annual revenue projections, citing “unforeseen market conditions” and “regulatory headwinds.” The announcement was followed by a delayed quarterly earnings report, which the company claimed had been affected by “technical difficulties.” However, the ASX found that the company had failed to disclose material changes in its financial position within the required 24‑hour window.

The ASX’s Regulatory Oversight Committee opened a formal investigation, alleging that Comvita had breached the Continuous Disclosure Obligations under the ASX Listing Rules. In September 2016, the company was fined NZ$120,000, and its board was required to undergo a mandatory compliance training program. In addition, a temporary suspension of the company’s stock trading was imposed while the investigation was ongoing. The move shocked investors and led to a sharp decline in the share price – the most significant one‑day fall the company had experienced in its listed history.

Comvita’s executive team responded by appointing a new chief compliance officer and instituting a robust internal reporting system. While the penalties were significant, the company managed to regain investor confidence by the end of 2016, with its shares recovering to pre‑investigation levels by early 2017.

The Metroglass Takeover Attempt

Seeking to expand its product portfolio and vertical integration, Comvita set its sights on Metroglass – a Sydney‑based manufacturer of specialty glass containers used in the packaging of food and beverages. Metroglass had recently been involved in a strategic partnership with several global beverage companies, and its glass bottles were prized for their high‑quality coatings and low environmental impact.

In late 2017, Comvita announced a friendly takeover bid for Metroglass, offering a premium of 25 % above Metroglass’s current market price. The bid was backed by a consortium of private equity investors, which believed that a combination of Comvita’s health‑product distribution network and Metroglass’s packaging expertise would generate significant synergies.

The Metroglass board, however, rejected the offer. In a statement, the board cited concerns over the valuation, the potential for cultural clashes between the two firms, and the risk that the merger would divert managerial attention from core business operations. In addition, the ASX flagged that the proposed acquisition would require the approval of a majority of shareholders, and preliminary shareholder sentiment leaned towards a “no” vote.

Following the rejection, Comvita’s stock price fell sharply. Analysts cited the failed bid as a sign of the company’s overreaching ambitions, and some commentators warned that the acquisition attempt may have strained the company’s cash reserves. The failure also forced Comvita to re‑evaluate its growth strategy, shifting focus from aggressive acquisitions to organic expansion and product innovation.

Long‑Term Consequences and Lessons Learned

The combined effect of the regulatory investigations, the Henry’s DGL supply‑chain fallout, and the failed Metroglass bid has reshaped the narrative surrounding Comvita. While the company has demonstrated resilience, its share price remains volatile, and it has struggled to maintain a consistent upward trajectory.

Key takeaways for investors and regulators include:

1. Supply‑Chain Transparency – A single supplier’s missteps can have ripple effects across a corporate ecosystem. Diversifying suppliers and instituting rigorous compliance checks are essential.

2. Regulatory Discipline – Continuous disclosure obligations exist for a reason. Companies must adhere to tight timelines and transparency norms to maintain market confidence.

3. Strategic Alignment – Acquisitions must be carefully vetted to ensure they align with core business objectives and do not dilute managerial focus.

4. Stakeholder Communication – Open, timely communication with shareholders can mitigate the impact of setbacks and preserve goodwill.

In the months following the Herald’s investigative reporting, Comvita’s leadership has taken steps to address the criticisms. A newly appointed independent board, coupled with a revamped compliance framework, signals a commitment to rebuilding trust. The company’s future hinges on its ability to navigate a complex regulatory landscape while delivering tangible value to its shareholders. For the broader market, the saga serves as a stark reminder that growth, when coupled with lax oversight, can precipitate dramatic reversals – a cautionary tale for any enterprise operating at the intersection of health, commerce, and regulation.