Express Kenya’s majority shareholder and chief executive Hector Diniz will not make a new takeover offer for the logistics firm after raising his stake in the company to a new high of 71.86 percent.
Mr Diniz last year failed in his bid to buy out the minority shareholders and de-list the firm from the Nairobi Securities Exchange (NSE).
The CEO, who already owned a 61.64 percent stake, made an offer of Sh5.5 per share which was accepted by shareholders with 9.78 percent equity, bringing their total stake to 71.42 percent.
This fell short of the 75 percent threshold and Mr Diniz, who had an option of raising his bid or extending the acceptance period, decided to let the offer lapse.
He, however, recently acquired an additional 10.22 pecent stake by converting a total of Sh80 million loans the logistics firm owed his companies to equity.
The company says in a notice that Mr Diniz will maintain the status quo after the debt-to-equity deal.
“Hector Robert Diniz does not intend to make a take-over offer,” Express Kenya said in a notice communicating the CEO’s intentions as disclosed to the Capital Markets Authority (CMA). Acquisition of the additional shares had raised the prospect that Mr Diniz could make a new bid for the company, having boosted his chances of hitting the minimum buyout target of 75 percent.
He would have needed shareholders owning just 3.14 percent to make a successful new buyout bid. Minority shareholders will now be keen to see what plans Mr Diniz has for the company whose strategy of transforming from the collapsed logistics business to real estate has been scuttled by lack of funding.
Express Kenya narrowed its net loss 22.8 percent to Sh69.6 million in the year ended December, helped by lower costs. The company had made a net loss of Sh90.3 million the year before.
The smaller loss came amid significant reductions in costs, including administrative expenses that fell to Sh28.8 million from Sh56.9 million.
Continued losses, however, saw the company’s negative net worth widen to Sh136.8 million from Sh67 million.