Former BOC director loses bid to block Carbacid dealThursday October 20 2022
The High Court has dismissed a petition by a former director of BOC Kenya seeking to halt takeover of the company by Carbacid Investments Plc and its affiliate Aksaya Investments LLP.
The court ruled that Lucy Njoroge was trying to use a constitutional petition to resolve a commercial row and that she had not shown she was a vulnerable shareholder having served on the board of the gases maker. Ms Njoroge resigned as a non-executive director in 2020 after the end of her second three-year term. She had served on the board since September 2014.
“The petitioner has raised various issues that are commercial in nature and failed to define and plead with precision how her constitutional rights have been infringed,” said Judge Abigail Mshila in a ruling issued on September 23.
“The petition is in essence a commercial dispute under the guise of a constitutional petition and as such it must fail.” The Sh1.2 billion proposed buyout of BOC Kenya stalled following filing of the court case and another legal challenge that is before the Capital Markets Tribunal and, which was filed by the company’s former chairman Ngugi Kiuna.
Mr Kiuna holds a 7.6 percent stake in the Nairobi Securities Exchange-listed firm. Dismissal of the High court case leaves it under the tribunal, which has not been acted on due to lack of quorum. Ms Njoroge said in court that Carbacid’s offer to acquire buy BOC Kenya at Sh63.5 per share undervalues the industrial and medical gases manufacturer.
She claimed that BOC should be valued at Sh3.8 billion as per the company’s books of accounts and the company sent a circular to shareholders indicating the offer did not fully price the firm’s worth.
Dismissal of the case clears part of the obstacles that have delayed the deal over a year after the suspension of the buyout as a result of the objections. The deal will still have to wait for the conclusion of Mr Kiuna’s objection before the tribunal. The businessman also argued that Carbacid’s offer is inadequate.
BOC Kenya’s majority shareholder, BOC Holdings (UK), has already committed to selling its 65.38 percent stake to the offer on those terms.
An independent financial advisor hired by BOC to review Carbacid’s offer said the company is worth at least Sh91.76 per share or an aggregate of Sh1.7 billion.