Centum seeks to buy all Rea Vipingo shares

Centum has offered to buy all shares in agriculture firm Rea Vipingo at Sh50 a share.

This comes a week after a similar bid by the current majority shareholder.

The hostile takeover bid placed on Tuesday sweetens the deal for the small shareholders by Sh10 a share in what experts say is a fight for the expansive real estate currently held by Rea Vipingo.

The sisal plantation firm owns nearly 70,000 acres of land in Kenya and Tanzania.

“Centum Investments Company Ltd hereby notifies you of its intention to make a competing take-over offer to acquire for cash consideration all issued ordinary shares of Rea Vipingo Plantations that are not beneficiary owned by and registered in the name of Centum,” managing director James Mworia said in a signed notice posted on Tuesday.

Two weeks ago, Rea Trading offered to buy the balance of 57.5 per cent it has no control over at Sh40 a piece, a 45 per cent premium on trading price at the bourse, putting the value of the firm at Sh2.4 billion.

Centum price is now 25 per cent higher, putting the value of the firm at Sh3 billion.

“These are companies that have been undervalued for a long time,” stock analyst at Suntra Investment Johnson Nderi said.

“Centum has provided the flexibility and shown the level at which the companies are willing to go to get value for their shareholders,” he said.

Rea Trading had retained Commercial Bank of Africa to fund the buyout with a loan of Sh694 million.

For the deal to go through, shareholders controlling more than 75 per cent of the firm or 45 million units must support it. Centum bid will most likely scuttle Rea Trading bid.

The competing takeover will be set out in an offer document that complies with the Capital Markets Authority regulations, 2002.