Centum’s counter-offer sparks bidding war on Rea Vipingo
James Mworia, chief executive officer, Centum Investments. Centum has made a Sh2.98 billion counter offer for Rea Vipingo Plantations, sparking off a bidding war against two British brothers. Photo/FILE
What you need to know:
Centum Investments has made a Sh2.98 billion counter-offer for Rea Vipingo Plantations
Centum, which already owns 296,500 shares or 0.49 per cent of Rea Vipingo, has disclosed that it intends to buy all the shares of the agricultural company which it does not already own
The investment firm is seeking to buy the remaining 59.7 million shares representing a 99.51 per cent stake and is offering Sh50 per share
Centum’s offer is valuing Rea Vipingo Plantations which has 60 million shares issued at Sh3 billion compared to Rea Trading Company’s offer of Sh40 a share which is valuing the sisal operator at Sh2.4 billion
Centum Investments has made a Sh2.98 billion counter-offer for Rea Vipingo Plantations, sparking off a bidding war against two British brothers.
Centum, which is also listed on the Nairobi Securities Exchange (NSE) and which already owns 296,500 shares or 0.49 per cent of Rea Vipingo, has disclosed that it intends to buy all the shares of the agricultural company which it does not already own.
Rea Trading Company, the majority shareholder of the firm which operates sisal plantations in Kenya and Tanzania, on November 14 offered to take over all the shares of Rea Vipingo Plantations which it does not already own.
The company, which is owned by two British nationals, Richard Robinow one of the directors of Rea Vipingo Plantations and his brother Jeremy Robinow already holds 20.57 per cent or 12.34 million shares of the agricultural firm.
It is also the beneficial owner of another 36.47 per cent or 21.88 million shares which are under London Stock Exchange listed Rea Holdings plc, a nominee of Rea Trading Company.
“Centum hereby notifies you of its intention to make a competing take-over offer to acquire for cash consideration all the issued ordinary shares of Rea Vipingo Plantations that are not beneficially owned by and registered in the name of Centum,” said James Mworia, chief executive officer, Centum in a notice to shareholders on Tuesday.
Centum, which is seeking to buy the remaining 59.7 million shares representing a 99.51 per cent stake is offering Sh50 per share bringing the total amount it is willing to spend on the deal to Sh2.98 billion.
The investment firm’s offer is valuing Rea Vipingo Plantations which has 60 million shares issued at Sh3 billion compared to Rea Trading Company’s offer of Sh40 a share which is valuing the sisal operator at Sh2.4 billion.
Centum said that it will continue with its counter offer if it receives acceptances which when aggregated with what it already owns will be more than 15 million shares representing more than 25 per cent of the sisal operator.
Rea Vipingo shares last traded at an average price of Sh27.50 meaning that Centum’s counter offer is at a 163.16 per cent gain from Sh19 at the start of this year.
The offer is at an 81.82 per cent premium from its last traded price and at a 25 per cent premium over Rea Trading Company’s offer.
“If Rea Vipingo Plantations continues to meet the eligibility requirements for listing following completion of the competing counter-offer, it is the intention of Centum for Rea Vipingo Plantations to continue to remain listed on the NSE,” said Mr Mworia in the statement.
Centum's share closed at Sh31.50 on Monday, more than double its opening price of Sh12.35 at the beginning of this year.
The counter offer right after South Africa-based Dimension Data Plc took over AccessKenya which was delisted last week and Al-Futtaim Group’s offer for CMC Holdings which is still pending.
Rea Trading Company’s offer, which is being funded using loans obtained from Commercial Bank of Africa, if accepted will also result in the delisting of Rea Vipingo Plantations.
At least eight companies have delisted from the NSE for various reasons including takeovers and failure to comply with the bourses rules.
Unilever Kenya delisted in 2009 while paper sack and carton maker East African Packaging Ltd delisted in 2003 after minority shareholders were bought out.
British trading firm African Lakes Corporation delisted in 2003 for not complying with trading rules and Kenya National Mills was taken over in 2002.
Others such as Pearl Dry Cleaners, Lonrho Motors, Theta Group and Regent Undervalued Assets delisted in 2001 after they also failed to comply with trading rules.
