Rea Vipingo owners sweeten offer


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

REA Trading Limited has offered shareholders of Rea Vipingo Plantations Limited a higher price for their stake in the listed sisal producer and an opportunity to benefit from future windfalls.

The firm is now offering a premium offer price of Sh70 per share. In addition to this, shareholders who accept the R.E.A 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.

According to Richard Robinow, the chairman of R.E.A. Trading Limited, in revising terms of its takeover offer, his firm had recognised that the originally proposed terms may not have fully accounted for the potential alternative use value of part of the 10,000 acre Vipingo Estate, which is owned by the sisal grower.

“After we successfully take over REA Vipingo, our intention is to encourage and support the firm to realise value from Vipingo Estate. However, this will be concentrated in areas that are most immediately suitable for development for alternative use.

“We believe that it is only fair that, to the extent practicable, an appropriate share of whatever premium is realised from sale of this land should go to existing shareholders of REA Vipingo, many of whom have supported the company over a long period,” Mr Robinow added.

R.E.A. Trading has indicated that REA Vipingo would continue sisal growing in order to maintain its position as the leading sisal producer in East Africa.

“We hope that sisal growing operations can be continued at REA Vipingo for many years to come. R.E.A Trading intends that the other existing plantation operations of the REA Vipingo group in Kenya and Tanzania should continue as currently constituted,” Mr Robinow said.

He added that R.E.A Trading, which currently holds 57 per cent of REA Vipingo, fully supports the policies adopted by the sisal grower’s management and ruled out any possibility of either change in the management or staff cuts as a direct result of the takeover offer.

“R.E.A Trading believes that its plans for continuing sisal growing will mean that REA Vipingo’s sizeable workforce should be unaffected by the takeover offer,” the R.E.A Trading chairman said.

In November 2013, R.E.A. Trading announced its intention to take over 100 per cent of the issued shares of REA Vipingo, which is listed on the Nairobi Securities Exchange for KSh40 per share.