Nairobi-based reinsurer Zep-Re is eying a Sh464.4 million (R74.5 million) investment in multinational property developer Grit Real Estate Income Group.
The shares will be bought on the Johannesburg Stock Exchange (JSE) from which Grit intends to delist, citing high regulatory and compliance costs.
Grit says in a circular that it wants to sell five million shares to ZEP-Re and another two million to Botswana Development Corporation Limited (BDC), a development finance institution.
Zep-Re has applied to acquire the five million shares for a cash consideration of Sh92.90 (R14.90) per share. The offer to Grit shareholders were open for acceptances from last Friday and closes on July 24.
“The offerors (Zep-Re and BDC) have agreed to make the offer to the company (Grit) to purchase shares held by shareholders on the JSE register on the record date for the offer, for the offer consideration, which offer will be limited to seven million shares,” reads the circular in part.
The deal will see the two institutional investors acquire a combined 12.75 percent of the total Grit shares held on the JSE register or an equivalent of 2.21 percent of the total issued shares.
Grit is currently listed on three exchanges — JSE, London Stock Exchange and Stock Exchange of Mauritius.
The Mauritius-based firm says exiting JSE, where its shares have been illiquid for a long time, will cut on regulatory compliance costs across the three exchanges and high costs incurred on paying three sets of advisors.
“The Grit board are of the view that the offer and subsequent delisting will eliminate the costs and administrative burden associated with a listing on the JSE and consolidate the three share registers into two registers,” says the firm.
Kenya Re, the top shareholder of Zep-Re with a 19 percent stake, will have an indirect exposure to Grit’s portfolio in the ongoing transaction.