Pair reaches out-of-court deal on sisal firm buyout

Centum Investment Company Limited and REA Trading Limited have entered an out-of-court settlement that will see the latter acquire Rea Vipingo Plantations Limited.

The two companies had placed competing bids for takeover of the sisal firm with REA Trading being the first to stake a takeover of all issued ordinary shares and Centum placing its offer later.

Centum subsequently filed an appeal before the Capital Markets Tribunal on May 9, last year, challenging the decision by the Capital Markets Authority to approve REA Trading bid.

The High Court issued an injunction blocking the takeover of Rea Vipingo as a result.

Centum has, consequently withdrawn its takeover offer of Rea Vipingo Plantations Ltd and its appeal against the bid made by REA Trading before the CMA tribunal.

PAY THE FULL FULL AMOUNT

As a result of the settlement, REA Trading will pay the full amount and an additional cash top-up of Sh15 per share, which together with its offer price of Sh70 per share makes the total offer to Rea Vipingo Plantation shareholders Sh85 per share.

RVP will keep ownership of and continue harvesting all the sisal currently on the land over its lifespan while areas with mature sisal that has been harvested will be available to Centum.

Centum will acquire 9,646 acres in Vipingo at a price of Sh180,000 each. Its subsidiary Vipingo Estates Limited which owns approximately 900 acres at about Sh340 million. The transaction prices totals to Sh2.1 billion.

According to the latest valuation commissioned by Rea Vipingo Plantations, the market value of the land is Sh175,000 per acre.

The proposed sale of land and RVP’s subsidiary, Vipingo Estates Limited are, however, subject to the shareholders of RVP passing an ordinary resolution at a general meeting to be held on 28th April 2015.