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Capital Markets

Delisting leaves 46 holdouts clinging to private CMC shares

CMC joins Internet firm AccessKenya on the list of companies that have gone private following majority acquisition deals. PHOTO | FILE
CMC joins Internet firm AccessKenya on the list of companies that have gone private following majority acquisition deals. PHOTO | FILE 

Some 46 investors who declined to sell CMC Holdings stock to Dubai-based Al-Futtaim are now shareholders of a private firm after the motor dealer was delisted on Thursday.

December regulatory filings showed the holdouts have more than 400,000 shares in CMC books eight months after Al-Futtaim paid out an estimated Sh7.5 billion to other shareholders.

The motor dealer shareholders were bought out at Sh13 per unit putting the value of the investors sucked into Al-Futtaim, the largest operating conglomerate in UAE, at approximately Sh5.2 million.

“Notice is hereby given on the de-listing of CMC Holdings Limited from Nairobi Securities Exchange effective February 11, 2015,” said the securities exchange in a public statement.

CMC shares have been suspended from trading at the bourse since September 2011 when claims of fraud and bad governance erupted amidst a boardroom battle.

The wrangles saw the company’s profits stumble as it lost major franchises like Jaguar, Land Rover and Volkswagen.

Many saw the buyout by the deep-pocketed Dubai company as a blessing with shareholders controlling 91 per cent supporting the deal in March last year, achieving the 90 per cent threshold that allowed it to proceed with the compulsory acquisition of the balance.

“Those who did not sell are now shareholders of a private company. Our involvement is to make sure they have full information but you can’t force them to sell,” said an official of the Capital Markets Authority, who however sought anonymity because he is not allowed to talk to the media on the regulators’ behalf.

The shareholders will lose the flow of information enjoyed when the firm was listed as operations of private companies are guided by their articles of association and memoranda of understanding.

Al-Futtaim said it bought CMC to get an entry into the regional consumer market, adding that it would expand its interests beyond the automotive sector to include retail and real estate ventures.

CMC joins Internet firm AccessKenya on the list of companies that have gone private following majority acquisition deals. AccessKenya was fully acquired in 2013 by South Africa’s Dimension Data for Sh3 billion or Sh14 a share.

Other firms that have delisted from the NSE in recent years include the African Lakes Corporation (Africa Online) and Unilever Kenya.

Majority shareholders of listed agricultural firm Rea Vipingo, UK Robinow Brothers, intend to delist the sisal plantations but Centum is bidding to buy majority stake.

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