Centum, UK firm deal paves way for Rea Vipingo buyout

NAIROBI: Centum Investment Company and REA Trading Ltd (REAT), based in London, have entered into a settlement agreement paving way for the takeover of Nairobi Securities Exchange-listed Company, Rea Vipingo Plantation (RVP).

The two competing parties reached an agreement to end a stalemate that delayed shareholders receiving proceeds of the impending buyout of the company.

The settlement agreement brokered by the two parties includes an agreement that Centum acquires 9,646 acres of land in Vipingo at a price of Sh180,000 per acre. It will also acquire RVP's subsidiary, Vipingo Estates Ltd, which owns 900 acres of land at a price of Sh340 million.

This brings the total payout for the two transactions to Sh2.1 billion, according to a statement issued by Centum. The latest valuation commissioned by RVP indicates the market value of the land to be Sh175,000 per acre.

On its part, Centum agreed to withdraw its takeover offer of RVP Ltd and its appeal against the bid made by REAT before the CMA tribunal, while REAT will proceed with takeover bid and raise offer price by Sh15 per share, bringing the total offer to shareholders to Sh85 per share.

The deal brokered by the two firms will see RVP keep ownership of the land and continue harvesting all the sisal currently growing on the estate over its lifespan, while mature sisal that has been harvested will be available to Centum.

Speaking about the settlement, Centum chief Executive Officer James Mworia said, "The agreement reached is a win-win for all parties involved, especially RVP shareholders who will benefit from the increased offer price of Sh85."

"They will therefore realise a higher price for their investment. Centum shareholders will also benefit from the acquisition by their company of a prime parcel of land in Vipingo."

The settlement comes after the High Court halted takeover of REA Vipingo Plantations, after Centum challenged the validity of a rival offer.

PENDING HEARING

The court order was issued despite a pending hearing of an application filed by Centum at the Capital Markets Tribunal to set aside the Capital Markets regulators acceptance of a bid submitted by REA Trading Ltd. Centum took the case to the High Court, arguing that the tribunal lacked quorum to hear the company's appeal.

Centum, which also made a bid to buy REA Vipingo, argued that REA Trading's offer violated domestic takeover laws and that its offer was "fictitious" because it is dependent on conditions that haven't been fulfilled yet.

Centum argued that REA Trading's offer contains a "contingency" that violates Kenya's Companies Act, according to the appeal submitted to the tribunal," the document shows.