The miller’s investors holding a total of 12.2 million shares or a 16.05 per cent stake tendered their shares and will receive an aggregate of Sh486 million.
Seaboard failed to receive the backing of shareholders with a minimum stake of 75 per cent but has decided to waive this threshold, allowing it to take up the offered shares.
Seaboard said the offer represented a significant premium to the share price of Unga which has historically traded below its book value.
The miller has weak net profit margins of less than five per cent but has built up cash reserves through conservative dividend payouts.
Unga Group’s #ticker:UNGA minority shareholders who accepted Delaware-based Seaboard Corporation’s buyout offer of Sh40 per share will be paid beginning Thursday next week.
The miller’s investors holding a total of 12.2 million shares or a 16.05 per cent stake tendered their shares and will receive an aggregate of Sh486 million.
Seaboard failed to receive the backing of shareholders with a minimum stake of 75 per cent but has decided to waive this threshold, allowing it to take up the offered shares.
“In accordance with the terms of the Seaboard offer, Seaboard has decided to waive the minimum acceptance threshold and intends to complete the acquisition of the shares for which acceptances have been received,” the multinational said in a notice.
“All other conditions of the Seaboard offer have been fulfilled and the offer has become unconditional in all respects. Accordingly, all Unga Group shareholders who accepted the Seaboard offer will be paid the cash offer price of Sh40.”
Unga has started the process of transferring shares of investors who accepted the offer to Seaboard, a move that will raise the multinational’s stake in the Nairobi Securities Exchange-listed firm to 18.97 per cent.
Seaboard already had a 2.92 per cent interest in Unga before making its bid. The multinational also has a separate 35 per cent stake in Unga Holdings –the investment vehicle through which the miller owns its operating units including Unga Farm Care East Africa.
The multinational is working in concert with the Philip Ndegwa family –which has a 50.93 per cent equity— in the transaction. A section of minority shareholders rejected the offer of Sh40 per share as undervaluing the company whose worth was estimated at up to Sh67.19 per share by an independent adviser.
Unga’s board endorsed the Seaboard offer, taking the lower valuation out of several presented to it by Faida Investment Bank, which it hired as an independent financial adviser (IFA).
Faida said in its report that the miller’s value per share could be anywhere between Sh67.19, Sh39.82 and Sh39.01 when assessed based on liquidation, cash flows and peer values respectively.
“The board is recommending that shareholders accept the offer price as representing a fair return on investment in the current circumstances,” Unga’s board said in its recommendation.
“Whilst the board recognises that the Sh40 offer is at the lower end of the IFA’s valuation range, the board deems it consistent with valuations of the business as a viable going concern and in line with normal share price performance for the counter.”
Seaboard said the offer represented a significant premium to the share price of Unga which has historically traded below its book value. The miller has weak net profit margins of less than five per cent but has built up cash reserves through conservative dividend payouts.
