KENYA – The Board of BOC Kenya, manufacturer of industrial, medical and special gases, has received a nod from the Capital Market Authority (CMA) to extend the deadline of serving its shareholders with the takeover documents and an independent advisor opinion from January 25 to February 5.
This comes after East Africa’s leading supplier of food grade liquefied carbon dioxide, Carbacid Investments Limited (CIL) in collaboration with Aksaya Investments LLP, served BOC with takeover offer documents earlier in the year, prompting BOC to appoint an independent advisor to carry out a valuation and give an opinion to offer guidance to shareholders.
The takeover bid followed the November 2020 notice of intention by Carbacid to acquire 100 percent ordinary shares of BOC for Ksh.1.24 billion (US$11.2m), reports Business Daily.
“The extension of time is to ensure that the independent advisor has sufficient time to undertake the valuation of BOC and prepare and render the fairness opinion.”
BOC Kenya
Aksaya Investments LLP is a local investment firm wholly owned by veteran local entrepreneur B. C. Patel, who also holds, jointly with A.B. Patel, a 40.38 per cent shareholding in Carbacid.
“The extension of time is to ensure that the independent advisor has sufficient time to undertake the valuation of BOC and prepare and render the fairness opinion,” said the firm in a statement.
“The additional days will also afford the board adequate time to consider the fairness opinion and issue our shareholders with the required recommendation.”
BOC Holdings the parent company of BOC Kenya, holding 65.38 per cent of the ordinary shares in the unit 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.
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.
Under the transaction, BOC had wanted to acquire 10.6 million shares in Carbacid, which would have brought its shareholding to 94 percent.
BOC’s sales and earnings have dropped substantially in subsequent years, owing to increased competition that has made it difficult for the company to raise prices despite rising costs.
Carbacid being a major producer of carbon dioxide which is used to make fizzy beverages like soft drinks among other applications, has also faced increased competition in recent years from alcohol manufacturers who harvest the gas as a by-product of their production process.
To this end the acquisition is meant to give Carbacid a competitive edge as it expands its portfolio.
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