Listed manufacturing firm Kenya Orchards Limited (KOL) has failed to publicly disclose the price at which a local strategic investor, is set to acquire an 84.4 percent stake in the company from its majority owners.
The company told its shareholders in a circular that the partial buyout by Africa Mega Agriculture Centre Limited (Amac) will be done by way of a private transaction.
The circular has directed shareholders who wish to get further details on the offer to physically inspect the relevant documents at the company’s registered office, ahead of an extraordinary general meeting in Nairobi on August 19 to ratify the deal.
The documents available for inspection are the circular itself, the notice of intention served by Amac last month, KOL audited financials for the year ended December 2023 and the draft asset purchase agreement between Amac and KOL's related company Njoro Canning Factory.
As part of the transaction, KOL will also cede certain assets to Njoro Canning to settle the loans owed to the latter firm and its directors, who are also shareholders of the Nairobi Securities Exchange (NSE)-listed firm.
Amac is acquiring the stakes held by Westpac Holdings Limited (34.28 percent), the company’s directors Thakarshi Keshav Patel (33.6 percent) and Vipul Thakarshi Patel (14.88 percent), and Hansa Dinesh Chandra Shah (1.65 percent)—which together amount to 10.86 million shares.
Mr Thakarshi Keshav and Mr Vipul Thakarshi also own 69 percent of Njoro Canning Factory, according to the latest filings by KOL for the 2023 annual period.
Amac has not made an offer to the remaining shareholders of KOL and will not be seeking to delist the company once it acquires its desired stake.
“The terms and conditions for the transfer of the assets by the company and the assumption of liabilities by Njoro Canning Factory are contained in the draft asset purchase agreement that is available for inspection at the registered offices of the company,” said KOL in the circular.
“As the offer for purchase has only been made to specified shareholders, shareholders who may not wish to remain following the entry of Amac have the option of disposing their shares in the normal way at the NSE.”
The company’s stance on public disclosure of the sale price per share mirrors that of Eveready East Africa when East Africa Batteries Limited sold its 35 percent stake or 73.4 million shares to Dubai based InvestAfrica FZCO last year.
The deal was also categorised as a private transaction, with the buyer also opting against buying out other shareholders or initiating a delisting of the company from the NSE.
The failure to publicly disclose the consideration in such deals denies the general market from finding out if the buyer paid a premium for their shares, which would help in gauging the true value of the company.
