Money Markets
UAP chairman Joe Wanjui: He said that Old Mutual got regulatory
approvals to buy out the PE firms, paving the way for a merger. PHOTO |
FILE
By John Gachiri, jgachiri@ke.nationmedia.com
In Summary
- UAP did not indicate when the listing will happen but analysts at Genghis Capital estimate that it will take more than six months before the firm’s shares can be traded on the NSE.
- The listing will make the new entity the seventh insurance company on the NSE. UAP operates in Kenya, Uganda, South Sudan, Rwanda, Tanzania and DR Congo.
- Sources privy to the deal said the two firms have begun integrating their operations but are still far from making key strategic decisions such as rebranding.
UAP Holdings and Old Mutual Kenya have begun merging
the two businesses ahead of a planned listing of the combined entity on
the Nairobi Securities Exchange (NSE).
UAP owners agreed to the listing during the annual general meeting in Nairobi last Friday.
The decision follows Old Mutual raising its
shareholding to 60.66 per cent from 23.3 per cent after the South
African firm bought a combined 37.3 per cent from private equity (PE)
firms Aureos, Africinvest and Swedfund for around Sh14 billion.
UAP chairman Joe Wanjui announced that Old Mutual had received regulatory approvals to buy out the PE firms.
“The combined UAP and Old Mutual businesses in
Kenya will be enhanced to include insurance, investment management,
properties, banking and securities brokerage thus creating a strong
operating platform to continue growing the business,” said Mr Wanjui in a
statement.
Listing will also make it easier to trade the
firm’s shares and help in price discovery. The stock is currently traded
over-the-counter at up to Sh200.
UAP did not indicate when the listing will happen
but analysts at Genghis Capital estimate that it will take more than six
months before the firm’s shares can be traded on the NSE.
“UAP bears the possibility of listing first half
2016; after a 60.66 per cent strategic acquisition by Old Mutual, which
will also expand networks and its pension business. Listing will be a
huge liquidity boost for early investors,” said a market report by
Genghis Capital.
The 2014 annual report shows that as at the end of
last year the company had 995 shareholders but most of the company’s
stock was held by a few large investors.
Old Mutual first bought into UAP in January by acquiring a combined 23.3 per cent stake from Centum Investments and businessman Chris Kirubi for around Sh8.8 billion.
Centum sold its stake to get funding needed for its massive real estate, financial services and power projects.
Other large shareholders include Joe Wanjui who has
a 20.46 per cent stake and former chief executive James Muguiyu who has
a 5.97 per cent stake.
The listing will make the new entity the seventh
insurance company on the NSE. UAP operates in Kenya, Uganda, South
Sudan, Rwanda, Tanzania and DR Congo
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