Express Kenya takeover hit by regulatory delays


An Express Kenya truck. The company is transforming from logistics to real estate sector. File photo | nmg

The planned takeover of Express Kenya #ticker:XPRS by its chief executive, Hector Diniz, is set to take longer following a delay in getting regulatory approval for the process to commence.

Mr Diniz, who intends to buy the 38.36 per cent stake he does not own, said the takeover offer documents would have been sent to shareholders by end of January.

The form of acceptance prepared by the CEO’s investment vehicle Diniz Holdings, a shareholders’ circular prepared by Express Kenya’s board of directors and a report of an independent advisor are, however, yet to be released as the Capital Markets Authority (CMA) is still reviewing them.

“All information is with CMA and we are still waiting for approval before they (the offer documents) can be sent out,” Dr Chris Obura, the chairman of Express Kenya, told the Business Daily.

The CMA confirmed that it is looking into Diniz Holdings’s disclosures, but did not say why the process has dragged on and when it anticipates it could give its approval.

“The Authority will be considering the application for approval,” the regulator said in a statement.

The delay in circulating the documents will further affect the remaining parts of the transaction process including a shareholding meeting to ratify the buyout.

READ: Express Kenya resumes trading on NSE

At the offer price of Sh5.5 per share, Mr Diniz could pay up to Sh74.7 million to buy out the minority interests, assuming they all sell their holdings.

The thinly traded stock rallied from lows of Sh3.7 but has changed hands below the buyout price in most of the days since the takeover bid announcement.

The buyout signals Mr Diniz’s confidence about the company’s future prospects.

Express Kenya, which is transforming from logistics services to real estate, is still in losses and its liabilities exceed its assets.

The company’s net loss narrowed to Sh90.3 million in the year ended December compared to Sh96.9 million the year before, with its net worth turning to a negative Sh67.1 million in the review period.