The firm is now offering a premium offer price of Sh70 per share higher from their earlier Sh50 offer price making it the highest offer and topping Centum’s bid of Sh50 and Vania Investments Pool Limited Sh55 offer price.
In addition to this, shareholders who accept the REA Trading offer will be entitled to a pro-rata share of dividends or distributions of proceeds from future sale of land for up to Sh15 per share.
REA Trading Limited Chairman Richard Robinow says in revising terms of its takeover offer, his firm had recognised that the originally proposed terms may not have fully accounted for the potential alternative use value of part of the 10,000 acre Vipingo Estate, which is owned by the sisal grower.
“After we successfully take over REA Vipingo, our intention is to encourage and support the firm to realise value from Vipingo Estate. However, this will be concentrated in areas that are most immediately suitable for development for alternative use. We believe that it is only fair that, to the extent practicable, an appropriate share of whatever premium is realised from sale of this land should go to existing shareholders of REA Vipingo, many of whom have supported the company over a long period,” Robinow added.
REA Trading has indicated that REA Vipingo would continue sisal growing in order to maintain its position as the leading sisal producer in East Africa.
“We hope that sisal growing operations can be continued at REA Vipingo for many years to come. REA Trading intends that the other existing plantation operations of the REA Vipingo group in Kenya and Tanzania should continue as currently constituted,” Robinow said.
He ruled out any possibility of either change in the management or staff cuts as a direct result of the takeover offer.
“REA Trading believes that its plans for continuing sisal growing will mean that REA Vipingo’s sizeable workforce should be unaffected by the takeover offer,” Robinow added.
In November 2013, REA Trading announced its intention to take over 100 per cent of the issued shares of REA Vipingo, which is listed on the Nairobi Securities Exchange for Sh40 per share.
Last month Bid Investments withdrew its offer to buy shares in Rea Vipingo Plantations (RVP) in favour of its subsidiary, Vania Investment Pool Limited.
Bid established the company for the purpose of making a competing tender for the largest sisal producer in Africa. Their offer price, however, still remains at Sh55 per share.
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 owns and operates sisal farms in Kenya and Tanzania and is the largest sisal fibre producer in Africa.
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.