Delaware-based conglomerate Seaboard Corporation has ruled out raising its buyout offer price of Sh40 per share to Unga Group’s #ticker:UNGA investors. Shareholders who attended meetings called by Seaboard’s representatives in the past few days told the Business Daily that the multinational will not change its offer.
“The Sh40 per share is the only offer. They only wanted to explain how they arrived at that offer,” one of the shareholders said.
Some speculative investors traded the stock above Sh40 on the Nairobi Securities Exchange (NSE) following announcement of the takeover bid.
Seaboard clarified to the select shareholders who were invited to the meeting that an option to revise its offer within the June 6 window is only available if it chooses to respond to a competing bid should one materialise.
The multinational says it is comfortable picking up whatever shares it can buy at the offer price, whether it hits the threshold required to take the miller private or not.
Seaboard’s buyout offer of Sh40 per share values Unga at Sh3 billion, 18.8 per cent below its book value of Sh3.7 billion or Sh49.2 per share as of June 2017.
Seaboard, which already owns a 2.92 per cent of Unga, will raise its stake to 49 per cent if the acquisition goes through.
Unga’s board has endorsed Seaboard’s 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 a statement.
“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.”