Dubai firm extends CMC buyout offer period by three weeks
CMC Holdings showroom in Nairobi. Dubai firm Al-Futtaim was to close its offer period next Friday but has now extended it to February 14, 2014. Photo/FILE
What you need to know:
Al Futtaim was to close its offer period next Friday but has now extended it to February 14.
Shareholders controlling 50.6 per cent have agreed to support the takeover, meaning that Al Futtaim needs to secure a 24.4 per cent stake from retail investors to top up the balance.
Al Futtaim said in a statement that the extension is aimed at making up for the December holidays that reduced business days during which sale commitments could be received and processed.
A Dubai-based firm has given shareholders of CMC Holdings three more weeks to accept its Sh7.5 billion buyout offer.
Al Futtaim was to close its offer period next Friday but has now extended it to February 14.
The buyout offer opened on December 6 and Al Futtaim needs support of shareholders controlling at least 75 per of CMC for the deal to go through.
“It has become necessary that more time is allowed for Al-Futtaim and other relevant parties to work towards fulfilling the various outstanding conditions,” Al Futtaim said in a notice.
“In particular this relates to regulatory approvals from the Comesa Competition Commission and the Tanzania Fair Trade Competition Commission and consents from franchisors to the change of control of CMC.”
Comesa requires that it approves cross-border mergers and acquisitions from January last year.
CMC operates in Kenya and Tanzania which have their national regulators and also belong to the bloc. It must also seek the nod of the dealer’s franchise holders like Ford, Volkswagen and Nissan Diesel.
Shareholders controlling 50.6 per cent have agreed to support the takeover, meaning that Al Futtaim needs to secure a 24.4 per cent stake from retail investors to top up the balance.
Al Futtaim said in a statement that the extension is aimed at making up for the December holidays that reduced business days during which sale commitments could be received and processed.
The offer was also affected by late regulatory approvals and issuance of the formal bid documents to CMC’s 14,743 shareholders, a move that saw the offer pushed from October.
The extension was also to avoid the risk of failing to hit the 75 per cent subscription threshold by January 24 .
The Dubai firm says it expects the transaction—priced at Sh13 per share— to close by March 31. This will see CMC delist from the Nairobi Securities Exchange (NSE) where it last traded at Sh13.5 in September 2011 in the wake of a boardroom war.
Al Futtaim is seeking to buy the entire stock of CMC and says it will implement a compulsory acquisition of the dissenting auto dealer’s owners if it secures a 90 per cent acceptance rate.
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