Capital Markets

Longhorn sets June listing date as CMA approves application

A worker arranges books at Longhorn Kenya warehouse in Nairobi’s Industrial Area. The firm  is to list on the NSE by next month. File
A worker arranges books at Longhorn Kenya warehouse in Nairobi’s Industrial Area. The firm is to list on the NSE by next month. File 

Longhorn Kenya is to list on the Nairobi Stock Exchange (NSE) in the next few weeks after it was granted regulatory approval Thursday.

Longhorn Kenya chief executive Janet Njoroge said she expects that the book publisher will be listed by the end of June since, listing by introduction does not take long compared to an initial public offering (IPO).

“I do not think we need to wait any longer because it is listing by introduction,” Mrs Njoroge told the Business Daily.

Mrs Njoroge said Longhorn’s board was discussing a timetable on listing, but was targeting the end of next month.

The Capital Markets Authority (CMA), the industry regulator, said that its board resolved to approve Longhorn’s application to go public after the publisher met all listing requirements.

“The Authority has granted approval following review of the applicant’s documents and is satisfied that Longhorn Kenya Limited has met adequate disclosure of material information in accordance with the requirements of the Capital Markets Act and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002,” said the CMA chief executive Mrs Stella Kilonzo.

Longhorn Kenya is set to become the region’s first publisher to go public.

It will list by introduction 58,500,000 ordinary shares of Sh1 each on the Alternative Market Segment of the NSE.

Before the move to go public via the NSE, the shares were trading on the Over-the-Counter (OTC) market at the Sh66-price range.

The journey from the OTC to the NSE began in the last half of 2011 when the publisher appointed NIC Capital as the lead transaction advisor, African Alliance Investment Bank as the sponsoring broker and Brightspark as the marketing and communications advisor.

In January the Longhorn bought Dar-es-Salaam-based Delah Publishers’ for Sh12.5 million, the money consisting of fees in intellectual property rights and tradeable stock.

At the time Longhorn’s management said the Tanzanian market had the potential to add over half a billion shillings to group revenues over the next eight years.

“We expect to rake in a minimum of Sh72m per year on net sales over the next eight years, and from the market response this far this could very easily more than double,” said Longhorn publishing manager, Musyoki Muli.

Prior to buying Delah Publishers, Longhorn operated in Tanzania through a wholly-owned subsidiary launched in 2006. Longhorn’s sales outside Kenya account for 33 per cent of total revenue. The publisher has a presence in Rwanda, and Uganda where the firm operates through a sales agent and a subsidiary respectively.

Longhorn Kenya Limited will become the first publishing firm to go public in the Sh12 billion industry, giving owners the opportunity to unlock the value of their shares.

Listed investment company Centum is Longhorn’s lead investor with a 35 per cent stake which it bought in 2008 for Sh241 million.

Businessman and Tetu MP Francis Nyammo is the second largest shareholder with an 11 per cent stake while Mureka Investments controls 2.7 per cent of the firm’s shares. Other top shareholders include Kamami Investments with 2.1 per cent and Text Book Centre with two per cent.

Net profits soared to Sh146 million last year, about six times more than the Sh22 million it made in the 2010 financial year.