NAIROBI, Kenya, Mar 26 – Centum Investment Company and REA Trading Limited (REAT) have finally settled their dispute and signed a deal for the takeover of the largest sisal fibre producer in Africa, Rea Vipingo Plantations (RVP).
In the deal, Centum will acquire a total of 9,646 acres of land in Vipingo at a price of Sh180,000 per acre.
Centum will also take RVP’s subsidiary, Vipingo Estates Limited which owns approximately 900 acres of land, at a price of approximately Sh340 million.
“The transaction prices totals to approximately Sh2.1 billion. According to the latest valuation commissioned by RVP, the market value of the land is Sh175,000 per acre,” read an agreement statement from Centum.
On the other hand, REA Trading will take over RVP at a share price of Sh85 per share from Sh70 which it had earlier offered.
“REAT will proceed with its takeover bid and it has indicated it will pay the full amount of an additional cash top-up of Sh15 per share, which together with its offer price of Sh70 per share, makes the total offer to RVP shareholders Sh85 per share.”
Centum says it will only take the land and that it has withdrawn its takeover offer of shares of Rea Vipingo and its appeal against the bid made by REAT before the Capital Markets Authority (CMA) tribunal.
Centum and REAT were among the highest and competing bidders for the take-over of Rea Vipingo, a move that brought about contention between the two firms.
But after the deal, RVP will keep ownership of and continue harvesting all the sisal currently growing on the land over its lifespan while areas with mature sisal that has been harvested will be available to Centum.
“The agreement reached is a win-win for all parties involved especially RVP shareholders who will benefit from the increased offer price of Sh85 and will therefore realise a higher price for their investment. Centum shareholders will also benefit from the acquisition by their company of a prime parcel of land in Vipingo,” noted Centum CEO James Mworia.
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.
The proposed sales of land and RVP’s subsidiary, Vipingo Estates Limited, are however subject to the shareholders of RVP passing an ordinary resolution at a general meeting to be held on April 28, 2015.