Companies

Zep-Re completes purchase of Sh490m stake in property firm

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Zep-Re managing director Hope Murera. FILE PHOTO | NMG

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Summary

  • The shares were bought on the Johannesburg Stock Exchange (JSE) from which Grit will delist effective tomorrow (Wednesday), citing high regulatory and compliance costs.
  • Grit had offered five million shares to Zep-Re and another two million to Botswana Development Corporation Limited (BDC), a development finance institution.
  • Zep-Re had applied to acquire the five million shares for a cash consideration of Sh97.8 (R14.90) per share.

Nairobi-based reinsurer Zep-Re has completed the purchase of a Sh490 million (R74.5 million) stake in multinational property developer Grit Real Estate Income Group.

The shares were bought on the Johannesburg Stock Exchange (JSE) from which Grit will delist effective tomorrow (Wednesday), citing high regulatory and compliance costs.

Grit had offered five million shares to Zep-Re and another two million to Botswana Development Corporation Limited (BDC), a development finance institution.

Zep-Re had applied to acquire the five million shares for a cash consideration of Sh97.8 (R14.90) per share.

The offer to Grit shareholders were open for acceptances from Friday (July 3) and closed successfully on July 24.

“Shareholders are hereby advised that the maximum number of shares for which acceptances may have been received has not been exceeded and accordingly all the conditions precedent to the offer have been fulfilled and the offer has now become unconditional,” Grit said in a trading update.

“Accordingly, the settlement of the offer will proceed in accordance with the timetable set out in the cirular and Grit will delist from the Main Board of the JSE Limited with effect from Wednesday, 29 July 2020.”

Zep-Re and BDC have acquired a combined 12.75 percent of the total Grit shares that were listed on the JSE or the equivalent of 2.21 percent of the company’s total issued shares.

Grit is currently listed on three exchanges –JSE, London Stock Exchange (LSE) and Stock Exchange of Mauritius (SEM).

The Mauritius-based firm says that 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 now have an indirect exposure to Grit’s portfolio.

Grit has property investments in multiple markets including Kenya. The multinational owns half of Naivasha Buffalo Mall and also holds a pharmaceutical warehouse along Mombasa Road that it leases out to South Africa’s Imperial Health Sciences Logistics.

The firm last year announced that it was acquiring manufacturing facilities from Nairobi-based consumer goods manufacturer Orbit Products Africa in a cash transaction valued at more than Sh4 billion.