US firm bid for Unga Group flops

Unga Group managing director Nick Hutchinson. FILE PHOTO | NMG 

In Summary

• Buyout fails after the company declines to raise its offer following concerns of attempting to acquire the miller cheaply
• This is the second failed Nairobi Securities Exchange (NSE) takeover bid
• Failure of the takeover bid means Unga will retain its listing on the NSE.

By VICTOR JUMA
More by this Author

Delaware-based conglomerate Seaboard Corporation has failed in its bid to buy out Unga Group after the multinational was unable to garner the support of shareholders holding a minimum combined stake of 75 per cent in the miller.

This is the second failed Nairobi Securities Exchange (NSE) takeover bid after a section of minority investors in Express Kenya rejected a buyout offer from chief executive Hector Diniz.

Mr Diniz and Seaboard were accused of attempting to buy the respective firms on the cheap, with both acquirers refusing to raise their offers in the controversially proposed deals.

Unga, for instance, was found to be worth up to Sh67.19 per share while Seaboard made an offer of Sh40 per share.

READ: Unga rules out raising Sh40 buyout offer

READ: US firm Seaboard woos Unga investors in buyout bid

READ: CMA on the spot again over suspension of NSE firm

The multinational received acceptances amounting to 12.1 million shares or a 16.05 per cent stake in Unga, adding to its existing 2.92 per cent equity and another 50.93 per cent held by the Philip Ndegwa family with which it was working in concert to de-list Unga from the NSE.

This brought the total to 69.9 per cent, falling short of the 75 per cent minimum target.

Remains on NSE listing

Failure of the takeover bid means Unga will retain its listing on the NSE. #ticker:NSE

Those who accepted Seaboard’s offer could still get paid at the offer price of Sh40 per share or an aggregate of Sh486 million if the multinational receives a waiver of the takeover’s conditions from the Capital Markets Authority (CMA).

The conglomerate signalled its intention to take up the 12.1 million shares despite the failure to have Unga de-listed.

“Further announcement regarding the offer will be published in due course,” Seaboard said in a public notice.

In a circular to shareholders, the multinational said the takeover conditions could be waived, allowing it to buy the tendered shares.

“In the event of a waiver of a condition, the appropriate notices will be given to the CMA, the NSE and a public notice of such a waiver will be published in two English language daily newspapers with national circulation in Kenya within 24 hours of the waiver,” reads part of the circular.