, NAIROBI, Kenya, Mar 7 – Bidding for the takeover of REA Vipingo Plantations has gone a notch higher after Centum Investments upped its premium offer price to Sh75 per share from its previous Sh50 offer.
This makes the listed investment firm the highest bidder, upstaging competitor REA Trading which had recently revised its price offer for the listed sisal producer to Sh70 from their previous Sh40 per share bid.
In addition, REA Trading had offered shareholders a pro-rata share of dividends or distributions of proceeds from future sale of land for up to Sh15 per share.
Vania Investments Pool Limited had a Sh55 offer price.
The offer will be made to the shareholders of REA Vipingo following approval by the Capital Markets Authority (CMA) of the take-over offer documentation.
The offer documentation is anticipated to be dispatched to the shareholders in 12 weeks.
The offer may or may not be accepted by some or all of the shareholders and Investors have been urged to exercise caution when dealing in the shares of Centum before and during the offer.
In November 2013, REA Trading announced its intention to take over 100 percent of the issued shares of the sisal firm for Sh40 per share.
The offer was out shadowed by Centum, who in December announced a takeover bid of the sisal producer at Sh50 per share which was later out done by Vania Investment Pool Limited’s Sh55 price offer.
Centum currently holds a 0.49 percent stake in REA Vipingo, while REA Trading is the largest shareholder with a 57.04 percent stake in the sisal producer.
REA Vipingo is the largest sisal producer in Kenya and Tanzania, producing 12,000 tonnes of sisal fibre in Kenya annually and 7,500 tonnes of sisal fibre in Tanzania annually.
The agricultural firm has also begun a horticulture project and plans on establishing a wind energy generation facility at its Vipingo estate in Mombasa.
In the 2012 financial year, the company posted an 18.57 percent decline in net profit due to an increase in administrative expenses as well as energy costs in Tanzania.
The first half of 2013 was also a challenging period for the sisal producer, with net profit declining 8.5 percent due to inadequate rainfall levels as well as continued unreliable power supply in Tanzania.
The group is organized into two divisions; agriculture (cultivation, production of sisal fibre and cultivation of horticultural crops) and spinning services (conversion of sisal fibre into yarns and twines).
The bulk of group sales are made to a related party (Wigglesworth) at market price.