Global communications firm WPP on Monday increased its stake in Scangroup to 29 per cent after it acquired 10 million shares from Andrew White—the creative director of the Nairobi Securities Exchange (NSE) listed firm.
Data from NSE showed that a block sale of the 10 million shares worth at least Sh420 million exchanged hands between two foreign investors.
Bharat Thakrar, the CEO of Scangroup told the Business Daily that the transactions involved the firm’s top shareholders and an executive of the firm looking to harvest part of his investments after the expiry of a five year lock-in period.
“Andrew White unlocked his holding after expiry of the lock-in period in September. He sold to WPP,” said Mr Thakrar in a telephone interview on Monday.
The move has reduced Mr White stake in Scangroup from 8.32 per cent to 4.81 per cent while that of WPP direct stake has moved to 29.09 per cent from 25.57 per cent—cementing its hold of marketing communication agency.
Mr White becomes the second executive in Scangroup to reduce his interest after Koome Mwambia, the chief executive of Ogilvy East Africa Ltd sold 300,000 shares in September that earned him more than Sh12 million.
Mr Mwambia acquired the stake last August after Scangroup bought half of Ogilvy East Africa in a cash and share transaction worth Sh234 million and he reduced his interest at the expiry of the one year lock-in period.
Yesterday, the firm’s shares traded at Sh42 compared to Sh66.50 in January, meaning the bear run at the NSE has cost its shareholders Sh7 billion since the year began.
Mr White’s worth
Mr White’s decision to reduce his stake in the marketing firm puts him in step with the CEOs of Equity Bank and Cooperative Bank—James Mwangi and Gideon Muriuki respectively—who have sold part of their shares in the two banks this year.
Mr White is one of the founders of Scangroup along with Mr Thakrar 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 sale has seen him drop fourth largest shareholder in Scangroup to the sixth and his shares are now worth Sh575 million. 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.
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.