Billionaire investor Kimani ups Kakuzi stake to Sh1.7bn

Billionaire investor John Kibunga Kimani has raised his shareholding of agricultural company Kakuzi to 27.41 per cent, equivalent to Sh1.7 billion as per the company’s current market price.

The latest regulatory filings show that Mr Kimani raised his stake in Kakuzi by 1.31 percentage points between May and November last year, equivalent to a Sh79.5 million buyout at current rates.

The investor early last year announced his intention to eventually accumulate a 29 per cent interest in the company, on whose estates he was born and raised up as a squatter.

“If the directors offer me a directorship or ask me to appoint a nominee I will consider it,” said Mr Kimani in an interview.

Kakuzi’s articles of association give the company’s directors power to appoint new board members.

Other listed firms including Pan Africa Insurance Holdings have invited significant owners with less than 25 per cent stakes to serve on their boards as directors.

Kakuzi currently lists eight directors, mostly nominees of UK-based multinational Camellia Plc which is the controlling shareholder with a 50.7 per cent stake.

Besides having an eye on dividends and capital gains, Mr Kimani has bought into Kakuzi due to his historical association with the company.

The investor has often had to balance his interests as an investor in the company and what he has termed as its unfair treatment of squatters who he identifies with.

READ: Billionaire squatter raises stake in Kakuzi to 25 per cent

Mr Kibunga is now just 1.59 percentage points shy of his 29 per cent ownership target in Kakuzi, which he has declared he does not intend to take over.

His 27.41 per cent stake, which makes him the second-largest owner in Kakuzi after Camellia, is currently valued at Sh1.7 billion based on the firm’s current trading price of Sh321 per share.

The stock has gained 61 per cent over the past one year, largely on Mr Kibunga’s announcement in February 2015 of his intention to buy an extra four per cent stake in the company.

Similar share purchase announcements in the past have attracted speculators seeking short-term gains, leading to major price rallies, including that of Centum where Mr Chris Kirubi announced and concluded the acquisition of an extra five per cent equity in the company.

Mr Kimani has steadily accumulated his Kakuzi shareholding to the current level from a low of two per cent in 2005, buying an average of 2.5 per cent equity per year. The share accumulation signals his confidence in the company’s future prospects.

The investor holds significant stakes in other firms trading on the Nairobi bourse where he has a total portfolio of over Sh3 billion.

Kakuzi recorded an 11.2 per cent drop in net profit in the half year ended June 2015 as drought hurt its production and sale of avocadoes. The company made a net profit of Sh43.4 million in the period compared to Sh48.9 million a year earlier.

This came as sales dropped 6.1 per cent to Sh420.1 million, eroding its ability to surpass the profitability recorded in the previous period. Kakuzi however noted that its tea and macadamia operations had performed better in the period compared to the year before.