Joe Wanjui and James Muguiyi, who are also directors of UAP, exercised their option to sell a combined six per cent stake in the company to Old Mutual at a price per share of about Sh236.
This is significantly higher than the Sh180 per share at which Mr Kirubi, his company Centum Investment and a consortium of private equity funds sold a combined 60.7 per cent stake to Old Mutual for Sh20 billion in 2015.
Financial services giant Old Mutual has revealed how businessmen Joe Wanjui and James Muguiyi priced their Sh3 billion buyout in UAP Holdings in a deal that will see them earn a 31 per cent premium compared to the exit price of a group of earlier sellers including Chris Kirubi.
The duo, who are also directors of UAP, exercised their option to sell a combined six per cent stake in the company to Old Mutual at a price per share of about Sh236.
This is significantly higher than the Sh180 per share at which Mr Kirubi, his company Centum Investment and a consortium of private equity funds sold a combined 60.7 per cent stake to Old Mutual for Sh20 billion in 2015.
The London-based conglomerate said in a trading update that Mr Wanjui and Mr Muguiyi agreed to sell their six per cent stake later at a price that will be adjusted upwards by the return on a one-year bond and downwards by the dividends they will have received from UAP in the interim period.
“The put option exercise price is equal to the initial price (paid by Old Mutual plc in acquiring its current holding), increased by the Government of Kenya Treasury one year bond rates and reduced by dividends declared by UAP,” the multinational said.
“The settlement amount equates to R437 million, reflecting the contractual discount unwind and the movement in the Kenyan shilling to the rand over the period.”
One-year bonds have not been issued in recent years but the return on the equivalent 364-day T-bill is currently at nearly 10 per cent.
Mr Wanjui has earned dividends amounting to Sh147 million while Mr Muguiyi has pocketed Sh42.8 million after UAP declared a total payout per share of Sh3.4 in the last two years.
Mr Wanjui has 43.2 million shares equivalent to a 20.4 per cent interest while Mr Muguiyi has 12.6 million shares, placing his equity at 5.9 per cent.
Old Mutual did not specify the number of shares they are each selling but the duo is disposing 12.6 million units combined.
The transaction will raise the conglomerate’s ownership in UAP to 66.7 per cent.
Old Mutual is set to take an extra 6.5 per cent stake in UAP this year in a transaction that will see the multinational convert a Sh2.6 billion loan it gave the subsidiary into shares. The process of merging UAP with Old Mutual’s other local units continues.
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