Rival bidder Centum Investment Co., East Africa’s biggest publicly traded investment company, has said REA Trading’s offer violates domestic takeover laws because it depends on conditions that haven’t yet been fulfilled. The issue is being considered by the High Court because the mandated Capital Markets Tribunal lacks a quorum to hear the appeal.
REA Trading has proposed to buy the 43 percent of REA Vipingo it doesn’t already own for 70 shillings a share. It also said shareholders that accepted the offer would be entitled to a pro-rata share of dividends or distributions of proceeds from the potential future sale of land for as much as 15 shillings per share. Centum is offering 75 shillings a share.
Vania Investment Pool Ltd., a closely held Kenyan company, offered 80 shillings a share to buy REA Vipingo, before its offer was rejected by the Capital Markets Authority for missing a Feb. 28 deadline. Vania has asked the Court of Appeal to overturn an April 17 High Court ruling that upheld the regulator’s rejection of its offer.
REA Vipingo operates two sisal estates in Kenya that produce about 12,000 metric tons a year of the fiber, which is used to make rope and dartboards. Three estates in Tanzania produce more than 7,500 tons, according to the company’s website.
Richard Robinow, chairman of REA Trading, has declined to comment on the court case pending its outcome.
To contact the reporter on this story: Charles Wachira in Nairobi at email@example.com