BOC’s take over by Kenyan food grade liquefied C02 supplier Carbacid hit speed bumps

KENYA – The takeover of manufacturer of industrial, medical and special gases, BOC Kenya by Carbacid Investments Limited, East Africa’s leading supplier of food grade liquefied carbon dioxide, has run into new headwinds with BOC yet to serve its shareholders with the takeover offer documents.

In a notice, BOC informed its shareholders that it would not circulate the documents as planned pending the resolution of undefined issues.

“This is to allow for consultations pertaining to certain issues that have risen related to the proposed transaction and which impacts the takeover documents,” stated BOC’s board without indicating when the papers would be released.

Earlier last month, BOC applied and received approval from the Capital Markets Authority (CMA) to extend the time granted to serve its shareholders with the offer documents.

Carbacid Investments Limited (CIL) in collaboration with Aksaya Investments LLP placed a US$11.3 million takeover bid for 100% shares of BOC Kenya

The Ksh.1.24 billion (US$11.3m) bid, made by its rival Carbacid Investment and its single-largest shareholder Baloobhai Patel in late November, was to be served to the owners on February 5 after an initial extension from January 5.

Despite the delays, BOC Holdings the parent company of BOC Kenya, holding 65.38 per cent of the ordinary shares in the unit has already issued an irrevocable undertaking to the Offerors to accept the offer on certain terms and conditions including a long stop date of 31 July 2021.

In contrast, Carbacid shareholders approved the planned acquisition of the manufacturer at the end of January and only awaits requisite approvals from regulators and the BOC shareholders.

With a shareholder base of more than 3000 investors, delegates attending the AGM overwhelmingly voted (90.3 percent) in favour of the proposed acquisition.

The Chairman outlined the commercial rationale for making the offer and advantages to CIL of expanding its business portfolio through the proposed acquisition noting the fact that BOC and CIL have distinctly different business lines and customer bases.

As they ratified the offer, shareholders tasked the Board of Directors of CIL to all use reasonable efforts to complete the acquisition as soon as is possible.

“This acquisition is part of our diversification strategy and the combination of BOC’s product portfolio and services with our business is an excellent match that will position us to become a leading regional supplier of choice for industrial, medical and special gases and related equipment and services,” CIL Chairman Amb. Dennis Awori said during the AGM.

The bid by Carbacid marks a role reversal after the company was itself the takeover target of BOC in 2005 but the proposed transaction collapsed in October 2009 on regulatory roadblocks by CMA, citing breach of terms by the proposed acquirer.

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