Kirubi hits target with buyout of 29.9pc Centum Investment stock
Businessman Chris Kirubi has in recent years liquidated his interests in other publicly traded companies. PHOTO | FILE
Billionaire investor Chris Kirubi has hit his target of raising his interest in Centum to 29.9 per cent after acquiring an additional 4.9 per cent stake in two years.
Mr Kirubi’s equity in Centum stood at 24.99 per cent in September 2013 when he applied to the Capital Markets Authority (CMA) for an exemption from complying with the requirements to make a takeover.
The regulator requires investors who own more than a quarter of a Nairobi Securities Exchange-listed firm to state whether they intend to take full control when buying stocks equivalent to at least five per cent in it.
August regulatory filings show that the businessman had reached his target, holding a 28.19 per cent stake directly and the balance through investment vehicles including International House Limited.
“I have met my quota,” Mr Kirubi told Business Daily in a telephone interview.
The share purchase has cemented his position as the single largest investor in the Nairobi Securities Exchange-listed firm.
The businessman said the enlarged stake is meant to ensure Centum remains in the hands of local shareholders, adding that it is also an expression of his confidence in the firm.
The state-owned Industrial & Commercial Development Corporation (ICDC) holds the second largest stake in Centum at 22.97 per cent.
The extra 32.6 million shares bought by Mr Kirubi cost him more than Sh1 billion after Centum’s stock rallied partly due to the announcement that he would raise his stake.
Centum’s share price rose to a high of Sh84.5 last year but has since dropped to trade at Sh53 yesterday, valuing Mr Kirubi’s stake at Sh10.5 billion.
The share decline has hurt investors who bought at the peak the most since the company doesn’t pay dividends, saying its chief emphasis is on maximising shareholder wealth.
The dividend freeze has left shareholders to rely heavily on capital gains expected to be driven by an increase in the company’s net worth or book value.
Mr Kirubi has in recent years liquidated his interests in other publicly traded companies including KCB and Safaricom, concentrating his stock investments in Centum.
The businessman closed his share purchase at a time when Centum’s CEO James Mworia emerged with a 0.61 per cent stake in the company after buying four million shares worth Sh212 million.
Centum posted a 160 per cent growth in net profit for the year ended March, helped by a huge gain that it firm booked from the sale of its stake in insurance group UAP Holdings.
Its net profit in the period stood at Sh7.9 billion compared to Sh3 billion the year before. The firm earned Sh5.2 billion from the sale of its 13 per cent stake in UAP to Old Mutual, booking a gain of Sh2.8 billion in the transaction.
The company also exited two investment funds (Helios and Nigeria-based African Capital Alliance) in a Sh500 million transaction, from which it reported a gain of about Sh100 million.
Centum plans to exit investments in which it holds minority stakes.
Exiting UAP supplemented Centum’s other positive revenue inflows from sectors such as energy, fast moving consumer goods, financial services and the lucrative real estate.
The company intends to further diversify into more sectors including education, often relying on joint ventures with international investors to fund capital-intensive projects.
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