Rea Vipingo shareholders will now choose between two takeover bids after the High Court upheld the Capital Markets Authority decision to lock out an offer from Vania Limited for being time-barred.
Vania had placed the highest bid of Sh80 per share for the sisal grower, but submitted it on March 11, almost a fortnight after CMA’s February 28 deadline.
CMA rejected the bid prompting Vania Limited to seek a court interpretation on whether the regulator had administrative powers to restrict the bidding timeline.
“The deadline contained in the notice provided ample time for any person, who was interested in making a new offer or vary an existing offer, to do so,” said Justice David Majanja ruled, adding that the bidding could not be open-ended.
The battle for ownership of Rea Vipingo started in November last year with an initial offer of Sh40 per share from Rea Trading (REAT), which already owns 57 per cent of the listed agriculture firm.
This prompted rival bids believed to be motivated by the hidden gem that is the company’s vast land holdings of more than 70,000 acres at the Kenyan coast and in Tanzania.
Barring an appeal, Vania’s exit would leave shareholders to choose between the Sh75 per share offered by investment firm Centum and the Sh70 per share offered by REAT, which also has a conditional offer of Sh15 per share if a portion of the land is sold before 2019.
REAT has set 75 per cent acceptance by the company’s proxy holders as the threshold for the offer to be deemed successful. This means it only needs endorsement by 18 per cent of holders of the stock it does not already own.
Centum, which holds 0.5 per cent of the stock, has set 25 per cent as datum for success, meaning it would need support from other shareholders controlling 24.5 per cent of the company. Vania owns 1.4 per cent of the company through Kenyalogy.com.
Failure by the two bids to meet the set threshold could open another round of bidding.
According to the Standard Investment Bank, who were advisors in Vania’s bid, and Afrika Investment Bank’s valuations, Vipingo’s real value stands between Sh101.21 and Sh168.72 a share.
Analysts have valued the land holding of the company between Sh6 billion and Sh10 billion, higher than the valuations fronted by Centum (Sh4.5 billion) and REAT (Sh4.2 billion).
Controversy, however, still dogs the transaction after the Kilifi County government went to court alleging Rea Vipingo acquired the land fraudulently.
The county wants the National Land Commission to repossess the estate, acquired in 1939 under colonial land laws and distribute it to the community.