KENYA – Seaboard Corp, the American multinational conglomerate is planning to delist Unga Group from the Nairobi Securities Exchange (NSE) after a failed takeover bid of the Kenyan grain miller, according to Business Daily.
The grain and commodity merchandising company is yet to face another stand-off with minority shareholders and investors who rejected its offer that would have rendered the firm private.
However, Seaboard managed to win over a fraction of shareholders that is, the Philip Ndegwa family which holds a 50.93% shareholding in Unga, thus giving it a 69.9% controlling stake.
Before the bid, Seaboard had a 2.92% stake in Unga, with a separate 35% stake in Unga Holdings the investment vehicle through which the miller owns its operating units, including Unga Farm Care East Africa.
Short of the minimum
Seaboard had offered Unga a US$0.40 buyout per share, a lower value compared to what some of the shareholders had estimated on the Nairobi bourse.
Despite the backing from major shareholders, the firm could not garner the minimum 75% threshold that was required for a takeover.
Optimistic of a future waiver on the conditions of acquisition, Seaboard said it was going ahead to purchase 12.2 million shares tendered by investors who had previously agreed to accept the offer.
It said it was moving to call an extraordinary general meeting and ask shareholders to vote the delisting of the miller, but this may be blocked by investors with a combined ownership of at least 10%.
“It remains the intention of Seaboard to proceed with its proposal to seek a delisting of the company from the Nairobi Securities Exchange at an extraordinary general meeting to be convened in due course,” said Seaboard in a statement.
According to the Kenya securities law, delisting can only happen if a simple majority with a combined stake of at least 75% are represented in person or through proxies in a shareholders meeting where such delisting is planned.
And if investors holding a combined 10% or more equity vote against it, then the resolution is rendered null and void.
There could be a possibility of buying such investors out if Unga goes ahead to make the company private.
Seaboard will pay Unga’s minority shareholders who accepted their offer an aggregate of US$4.83 million, and the transfer of the 12.2 million shares will raise the multinational’s direct stake in Unga Group to 18.97%.
Unga’s board endorsed a lower valuation presented by its independent financial adviser Faida Investment Bank (FIB), despite US$0.67 per share estimated by an independent adviser.