CMC shareholders given one month to accept buy bid
CMC Holdings showroom in Nairobi. Shareholders have up to next month to accept buy-out offer. FILE
What you need to know:
In a notice to shareholders, Al-Futtaim said Tuesday the offer for purchase has officially opened, following regulatory approval by the Capital Markets Authority.
More than half (50.6 per cent) of CMC shareholders have already agreed to sell their shares.
The Dubai conglomerate in September announced plans to buy out 100 per cent shares of CMC Holdings at a price of Sh13 each.
Motor dealer CMC Holdings’ shareholders have until January 24 to accept a buyout offer for their shares by Dubai-based conglomerate Al-Futtaim.
In a notice to shareholders, Al-Futtaim said Tuesday the offer for purchase has officially opened, following regulatory approval by the Capital Markets Authority (CMA).
More than half (50.6 per cent) of CMC shareholders have already agreed to sell their shares.
“On successful completion of the transaction, CMC Holdings Limited is expected to be delisted from the Nairobi Securities Exchange, making the shares illiquid for those who do not take advantage of the offer,” said the notice.
Al-Futtaim is a multi-billion- dollar group that has eight operational divisions; automotive, electronics, engineering and technologies, financial services, general services, joint ventures, real estate and hospitality, and retail.
The Dubai conglomerate in September announced plans to buy out 100 per cent shares of CMC Holdings at a price of Sh13 each.
The acquisition price is 50 cents lower than the closing share price before the stock’s suspension from trading at the stock market, but could attract shareholders who fear that CMC’s loss of the franchise to market Land Rover vehicles in the region has affected its outlook.
The Jaguar Land Rover franchise accounted for nearly a quarter of CMC’s annual sales.
Shareholders controlling at least 75 per cent of the stock will have to accept Al-Futtaim’s offer for the Sh7.6 billion deal to go through.
The acquisition will be made through its subsidiary, Al-Futtaim Auto & Machinery Company (FAMCO), marking the conglomerate’s first investment in sub-Saharan Africa.
The Dubai-based firm in its offer statement issued several conditions geared towards protecting the value of the acquired entity from erosion. In a move to cut costs, CMC promised to freeze on the payment of dividends to current shareholders, in addition to the suspension of trading of shares at the NSE.
The agreement signed by the two companies on September 6 means that the shareholders who have not received dividends for the past two years will be getting one ultimate payout from Al Futtaim in the deal.
CMC is also seeking to retire some debt by raising Sh312 million through the sale of four properties in Kenya and Uganda ahead of its buyout.
The market regulator CMA has already withdrawn its three appointees on the CMC board-—Ms Zehrabanu Janmohammed, Dr Joshua Okumbe, and Mrs Susan Wakhungu-Githuku retired as directors of CMC in September after serving for 17 months.
CMC has in the past seen a high turnover in its boardroom linked to a protracted boardroom war that ended in February after feuding major shareholders struck a truce.
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