Centum, Director Agree to Sell 23% of Kenya’s UAP to Old Mutual

Centum Investment Co. of Kenya and director Chris Kirubi agreed to sell their combined 23.3 percent stake in UAP Holdings Ltd. to Old Mutual Plc for about 6.8 billion shillings ($75 million), a company official said.

The company, Kenya’s biggest publicly traded investment business, is selling its 13.75 percent holding in the Nairobi-based insurer, while Chris Kirubi, a director of Centum, is offloading his 9.58 percent stake, according to a statement e-mailed by the stock exchange.

The sale, more than a decade after purchasing the stake, is “in line with Centum’s mission to be Africa’s foremost investment channel by developing investment grade opportunities for other investors,” it said. Centum will receive about “close to” 4 billion shillings for its stake, while Kirubi will get about 2.8 billion shillings, Corporate Affairs Director Fred Murimi said in a phone interview.

Old Mutual’s purchase of the stakes follows its acquisition of Faulu Kenya, a microfinance company, in 2013, the same year it announced a 5 billion-rand ($431 million) African expansion plan announced. UAP has 4.22 percent of Kenya’s long-term insurance industry, above Old Mutual’s 3.86 percent share, according to Standard Investment Bank. Shares in the company currently trade at about 140 shillings each on the over-the-counter market.

“While the sale by Centum marks a typical exit after 10 years of investment, for Old Mutual it remains unclear if this investment marks the start or the end of” a merger of acquisition, Standard Investment Bank said.

Centum has announced a string of acquisitions in the past year as it targets a five-fold increase in assets to 720 billion shillings by 2019.

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