Local shareholders frustrate Unga Group take over by Americans despite huge odds

Even with the backing of the biggest shareholder at flour miller Unga Group, American firm Seaboard could still not wrench away shareholding from adamant Kenyans who refused to sell their stake.

The American firm and Victus Limited had created a holding group in 2002 where Unga Group Ltd holds 65 per cent stake and Seabord 35 per cent stake and used this vehicle to operate subsidiaries.

The Delaware firm wanted to buy 46.15 per cent stake to increase its shareholding from 2.92 per cent to 49 per cent making it a partnership with Victus, owned by the family of the late Philip Ndegwa, a former Central Bank governor. Victus owns 50.93 per cent of Unga Group.

A long-drawn out war ended Friday when shareholders with only 16 per cent stake agreed to the deal and Seaboard opted to take their stake to increase its shareholding to 18.9 per cent.

Seabord offered Sh40 per share for the company whose shares were trading at Sh29.5 at the time of announcement.

Opposition to the deal was seen immediately that market activity rallied to hit a high of Sh44 as shareholders felt the deal was undervalued.

When the deal approached closure, Seaboard asked CMA to extend the deadline blaming the dismal performance on changes in postal addresses and/or relocation of shareholders.

CMA gave them an additional 10 days to turn the tide yet they still could not manage to convince some shareholders.

Seaboard now says 8.1 per cent of shareholders who never responded have been handed over to Unclaimed Financial Assets Authority.

This is the second bid to take over a Nairobi Securities Exchange listed firm that has fallen flat on its face with shareholders opting to stay put.

Shareholders refused to sell their stake in Express Kenya to the firm's CEO.