Uncertainty as investors battle over Rea Vipingo

By JACKSON OKOTH

NAIROBI, KENYA: All eyes are on listed sisal firm REA Vipingo as minority shareholders Centum Investments and UK-based REA Limited, tussle to get a piece of it.

On the other side are sisal farmers whose fortunes will suffer if the new owners do not continue with growing sisal.

In the case of Centum, the size of land held by REA Vipingo is its main target in this acquisition deal. “Centum’s red hot real estate business is seeking more land and therefore this deal offers it a suitable entry point,” said Kariithi Murimi, a risk consultant.

For the UK firm, analysts point out to its desire to buy out minority shareholders, delist and then operate as a private firm.

“This request to delist, coming just after the one by motor firm CMC motors should be a worrying trend from the regulator’s stand point. This market still needs to deepen and have more players. Capital Markets Authority should begin to ask itself questions on whether its scrutiny and rules are too intrusive,” said David Owiro- an analyst at Institute of Economic Affairs (IEA). UK-based REA Trading has proposed to buy REA Vipingo shares at Sh70 each, higher than its original offer of Sh40 in November 2013. This offer is higher than Centum’s Sh 50 while Vania-which has been locked out by the courts- offered Sh 55.

“REA Vipingo sisal plantations are located in coastal regions of Taita and Voi, meaning land here may not be attractive for real estate development- at least for now.”

This according to Owiro means Centum could be motivated by something else in its bid to acquire REA Vipingo such as value addition in sisal production.

REA Vipingo listed on the Nairobi Securities Exchange (NSE) in 1996.