Centum Withdraws Offer for REA Vipingo as It Acquires Subsidiary

Centum Investments Ltd., Kenya’s biggest publicly traded investment business, withdrew its offer for sisal producer REA Vipingo Ltd. after settling a dispute with a rival bidder.

Instead, Centum will acquire 9,646 acres (3,904 hectares) of land in the coastal district of Vipingo as well as REA Vipingo’s subsidiary Vipingo Estates Ltd. for 2.1 billion shillings ($22.8 million), the Nairobi-based company said in an e-mailed statement. Centum also dropped its appeal against a bid by REA Trading Ltd., REA Vipingo’s biggest shareholder.

Kenya’s High Court halted the takeover of Africa’s biggest sisal grower on May 21 after Centum challenged the validity of REA Trading’s offer, arguing it violated Kenya’s Companies Act. REA Trading, which owns 57 percent of REA Vipingo, had offered 70 shillings a share to buy the remaining stake and a pro-rata share of dividends from proceeds of the potential future sale of land of as much as 15 shillings a share. The 85-shilling offer trumped Centum’s 75-shilling bid.

REA Trading “will proceed with its takeover bid and it has indicated it will pay the full amount” of 85 shillings per share, Centum said. REA Trading Director Richard Robinow wasn’t immediately available for comment when Bloomberg called his office on Thursday.

REA Vipingo was suspended from trading on the Nairobi Securities Exchange after REA Trading made an initial cash offer to acquire the company. The stock last traded on Nov. 13 at 27.50 shillings, giving the company a market value of 1.65 billion shillings.

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