Scangroup chief executive officer Bharat Thakrar cut his stake in the firm last year, earning millions of shillings. Photo/File
What you need to know:
The top shareholders including Bharat Thakrar, the CEO of Scangroup, Andrew White, the creative director of the marketing communication agency, and Koome Mwambia, former CEO of Ogilvy East Africa, have all cut their shareholding in the firm last year.
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.
The end of lock-up periods on shares of key shareholders in Scangroup has triggered sell-offs as the investors earn millions of shillings from the price rally.
The top shareholders including Bharat Thakrar, the CEO of Scangroup, Andrew White, the creative director of the marketing communication agency, and Koome Mwambia, former CEO of Ogilvy East Africa, have all cut their shareholding in the firm last year.
The share sales come after the expiry period, commonly known as lock-up, that the capital markets regulator had barred the top shareholders from selling their shares following the listing of Scangroup at the Nairobi Securities Exchange (NSE) and its purchase of half of Ogilvy East Africa.
Filings with the regulator indicate that Mr Mwambia’s stake in the agency dropped to 0.82 per cent in November from 0.99 per cent in June and 1.33 per cent in December 2010—removing him from the top 10 shareholder list.
He sold 468, 800 shares worth about Sh25 million between July and December in a year that saw Mr Thakrar make his first share sale since bringing the marketing services firm to the Nairobi bourse in 2006.
Mr White 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—earning about half a billion shillings from the stock sale.
Mr Thakrar told the Business Daily recently 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,” said Mr Bharat. “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.
Scangroup shares have gained 55 per cent over the past year to the current price of Sh63, valuing the stake of Mr Thakrar and Mr White at Sh3.26 billion and Sh769 million respectively.
Mr Mwambia acquired the stake last August after ScanGroup bought half of Ogilvy East Africa in 2010 in a cash and share transaction worth Sh234 million.
Under the deal, he was paid Sh20.6 million and given 3.1 million shares in ScanGroup in exchange for his 22 per cent stake in Ogilvy East Africa, but was barred from selling the shares for a period of between one and four years.
“Mr Koome entered into a lock-in agreement for part of the Scangroup shares for one year, some for two years and the majority for four years,” said Mr Thakrar earlier.
The shares were valued at Sh26.40 when Mr Mwambia sealed the purchase deal with Scangroup—which means he made capital gain of 138 per cent based on the firm’s current share price.
Mr Mwambia has emerged as one of the key beneficiaries of the Scangroup/Ogilvy deal since it has not only seen the value of his investments appreciate, but the Nairobi bourse has allowed him to easily harvest part of his interests.
His remaining stake is now worth Sh147 million—which is higher than the early valuation of his 22 per cent stake at Sh103 million despite of receiving Sh20.6 million cash and selling shares worth Sh27 million.
