Wanjui in Sh3.4bn UAP share sale deal

Mr Joe Wanjui (left) and Mr James Muguiyi. FILE PHOTO | NMG 

In Summary

• At Sh268.6 per stock, the offer represents a 49.2 per cent premium price
• The duo’s deal is valued higher compared to Old Mutual’s initial transactions, signaling the growth of UAP in recent years.
• UAP’s performance has been weaker than expected and the process of merging it with local subsidiaries of Old Mutual continues

UAP Holdings directors Joe Wanjui and James Muguiyi have an option to sell a combined six per cent stake in the insurer to Old Mutual Plc before September in a deal that could earn them Sh3.4 billion.

The London-based conglomerate disclosed the existence of the put option in a trading update, alerting its shareholders that its stake in the local insurer could rise to 67 per cent from the current 61 per cent.

The two shareholders did not participate in UAP’s 2015 share sales that saw Old Mutual spend Sh20 billion to build its stake from the buyout of billionaire entrepreneur Chris Kirubi, his investment firm Centum and a consortium of private equity firms.

Mr Wanjui retained his 20.46 per cent equity while Muguiyi also held on to his 5.97 per cent stake but the duo signed an option to sell the six per cent stake in the future.

Minority shareholders

“Two significant minority shareholders in UAP have the rights to collectively put up an aggregate six per cent shareholding in UAP to the group (Old Mutual) at any time before... September 2018) while the group owns less than a 66.7 per cent shareholding in UAP at a price determinable in accordance with the UAP shareholders’ agreement,” Old Mutual said.

“The exercise price of the minority anchor shareholders’ put option at the last practicable date is in the order of £24 million (Sh3.4 billion).

Mr Wanjui aknowledged the existence of the option but did not wish to comment on the matter when contacted by the Business Daily.

The duo’s deal is valued higher compared to Old Mutual’s initial transactions, signalling the growth of UAP in recent years.

Kirubi group

At Sh3.4 billion or Sh268.6 per share, the offer to the two shareholders represents a 49.2 per cent premium on the Kirubi group’s buyout price of Sh180 per share.

UAP’s performance has been weaker than expected and the process of merging it with local subsidiaries of Old Mutual continues, the conglomerate said.

Listing of the merged entity on the Nairobi Securities Exchange (NSE) has been postponed multiple times.