Capital Markets

Deacons listing puts CEO shares at Sh65m


Mr Muchiri Wahome, the Deacons CEO, is the ninth largest shareholder of Deacons. PHOTO | FILE

Deacons East Africa chief executive Muchiri Wahome’s stake in the firm will be worth Sh64.7 million when the firm lists on the Nairobi bourse’s Alternative Investments Market (AIMS) board on Tuesday.

Mr Wahome, the Deacons CEO since 2003, recently raised his stake to 3.5 per cent or 4.31 million shares after taking up an additional 585,244 shares through an employee share ownership plan.

The purchase meant that he took up half of the 1.1 million shares sold to employees through the ownership programme.

The clothing retailer will list by introduction a total of 123,558,228 shares at Sh15 each valuing the company at Sh1.85 billion.

Mr Wahome is the ninth largest shareholder of Deacons, and the only one in the top 10 to record any major share movement in the past three years.

“There has been no significant change in percentage ownership held by any major shareholders or the trading objectives of the group during the past three financial years apart from an additional 585,244 shares issued to Muchiri Wahome as a result of the dissolution of the Deacons Employee Shares Save Scheme,” says Deacons.

As at the end of June, Deacons’ top shareholder was Swedfund International AB with a 14.03 per cent stake, followed by Pinpoint Investments Limited (8.73 per cent), former Deacons CEO Diana Bird (7.96 per cent) and the estate of the late founder of the firm, Charles Mwangi, at 7.56 per cent.

READ: Deacons Kenya to list on Nairobi bourse after six-year wait

The stake held by Mr Wahome will also see him join a select number of listed firms’ chief executives who appear on the register of top shareholders of their companies.

The list includes WPP ScanGroup CEO Bharat Thakrar, Gideon Muriuki of Co-op Bank, ARM’s Pradeep Paunrana and Britam’s Benson Wairegi, all of whom were at the helm of their companies when they listed.

Companies have often used employee share schemes as a reward incentive and a means of retaining talent, giving employees a sense of ownership of the company.

Deacons set up its scheme in October 2010, financing the purchase of 640,000 shares—held in a trust—for permanent employees.

The number of shares in the scheme rose to 2.56 million following the share split and bonus issue in 2012, with 43 per cent of these taken up by the time the scheme closed end of March this year.

“Of the total number of shares, 1,098,736 were to be distributed to the eligible shareholders and 1,461,264 [which are yet to be taken up] would be retained in the trust,” Deacons said.

The unalloted shares retained in the trust will be sold after the listing and the proceeds returned to the company, following which the trust will be terminated.