Companies

Scangroup chief makes first share sale since IPO

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Mr Thakrar. Scangroup CEO. File

Scangroup chief executive Bharat Thakrar has made his first share sale since bringing the marketing services firm to the Nairobi bourse in 2006.

Regulatory filings show that his stake dropped to 18.19 per cent at the end of November compared to 19.25 per cent in December last year, meaning he reduced his holding by three million shares. Mr Thakrar has earned about Sh150 million from the sale.

Andrew White, the creative director of the listed firm, also cut his stake in the company to 4.28 per cent in November from 4.81 per cent last December and 8.32 per cent in November 2011.

Mr Thakrar said that the cash-in on the stock by Scangroup’s anchor shareholders does not represent a loss of confidence in the media services firm.

“This is the first time I sold my shares after the lock-in period ended,” Mr Bharat told the Business Daily in a telephone interview. “The money is for my personal use and investors should not read too much in the transaction”.

Mr Thakrar and Mr White are the founders of Scangroup and they were both barred from selling their shares by the Capital Markets Authority (CMA) for five years from 2006—when the company listed at the NSE.

Mr White was the first to take advantage of the expiry of the golden handcuffs’ period when he sold 10 million shares worth at least Sh420 million last December to Global communications firm WPP.

The move cut his stake to 4.81 per cent while that of WPP direct stake moved to 29.09 per cent from 25.57 per cent—cementing the global media firm’s hold of the marketing communication agency.

WPP also known Cavendish BV acquired a 27.5 per cent in Scangroup in 2008 for Sh1.3 billion after the company created 60 million new shares to accommodate it. Its direct stake is currently worth Sh5.6 billion.

Scangroup executives’ decision to reduce their stake in the marketing firm puts them in step with the CEOs of Equity Bank and Co-operative Bank--James Mwangi and Gideon Muriuki respectively--who have sold part of their shares in the two banks following the expiry of the lock-in periods.

Top shareholders in Equity and Co-operative Bank had a two-year-lock-in period that was attached to the two banks when they go listed at the NSE in 2006 and 2008 respectively.

Scangroup shares have gained 60 per cent over the past year to the current price of Sh68, valuing the stake of Mr Thakrar and Mr White at Sh3.52 billion and Sh830 million respectively.

Mr Thakrar sold the three million shares in the first half of the year when the stock averaged about Sh50 a piece.

The company’s net profit stood at Sh406.6 million in the six months compared to Sh374.5 million in a similar period a year before.

The marketing communication agency has in the past four years completed multi-million acquisition deals across East Africa.

Scangroup also purchased a 51 per cent in Ogilvy Africa in cash and stock transactions worth $2.3 million that gave it minority stakes in eight media agencies in South and West Africa of between 6.4 and 15.3 per cent. In buying Ogilvy Africa, Scangroup tapped a long list of multinational firms including beer giant SABMiller, Unilever and BAT.

Others are Multichoice, Zain and Sun International, which promise to rev up its profits given the huge media spend of these firms. In Kenya, the firm gained access to high net-worth clients such as Barclays Bank, Kenya Airways, India’s Bharti Airtel, and Telkom Kenya.

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