Capital Markets

Firm doubles initial offer for Rea Vipingo

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A Rea Vipingo sisal estate in Kilifi county. REA Trading has indicated that REA Vipingo would continue sisal growing. FILE

Rea Trading Company (RTC) has more than doubled its initial offer for Rea Vipingo Plantations in a last effort to bring the company under its control.

The company filed its offer of Sh85 per share on Friday, the last day set by the capital markets regulator for review of the three competing bids.

Rea Trading Company, owned by two British brothers, had initially made an offer of Sh40 per share, which was upped by Centum Investments’ Sh50 and later Vania Investment Pool (VIP)’s ’s Sh55. VIP is associated with businessman Dilesh Bid.

“The firm is now offering a premium offer price of Sh70 per share. In addition, shareholders who accept the Rea Trading offer will be entitled to a pro-rata share of dividends or distributions of proceeds from future sale of land for up to Sh15 per share,” said RTC chairman Richard Robinow.

Mr Robinow said the review was prompted by the first offer failing to consider the vaue of the potential alternative use of the company’s 10,000 acre Vipingo Estate. 

The new offer values the company at Sh5.1 billion compared to the initial Sh2.4 billion. RTC currently owns 57 per cent of the Rea Vipingo Plantation.

It was not clear the minimum number of shareholding RTC was targeting for the transaction to go through. RTC was looking for a loan of Sh694 million from the Commercial Bank of Africa to finance the first bid.

If the offer is accepted, Centum Investments would receive Sh21 million for its 0.5 per cent holding in the company and an extra Sh4.5 million in future in case of land transactions. VIP will get Sh71.1 million.

Tanzania land

Rea Vipingo Plantations owns 28,105 hectares of land (69,449 acres), with about half of it in Kenya and the other in Tanzania.

The land is in two estates in Kenya — Dwa Estate in Kibwezi has 22,205 acres while Vipingo at the Coast has 10,570 acres. In Tanzania it owns 36,645 acres.