Third Vipingo suitor ups stakes to Sh55 per share

By JEVANS NYABIAGE

KENYA: A third bidder has made a counter offer of Sh55 per share to buy out Rea Vipingo — brushing aside earlier offers by Robinow brothers and Centum. Mr Dilesh Bid, the managing director of Bid Insurance Brokers said his family is offering Sh55 per share to buy out other shareholders in the sisal producer.

“We can create shareholder value in Rea Vipingo plantation than has been in the past. I ask shareholders to sell the company to the highest bidder so that I can unleash true value.”

Earlier, investment banking firm AIB Capital had released a report that valued Rea Vipingo shares at Sh168.72, a price likely to stir more aggressive bidding for the sisal producer.

 This assessment, based on the value of the land and not that of the operations or business - large-scale sisal growing - is about three times what Centum has offered and four times what the Robinow brothers have offered to acquire Rea Vipingo.

 AIB Capital in a research note released yesterday said the total estimated value of land before adjusting for illiquidity discount, stands at Sh15.46 billion, pointing to the allure that the three bidders could be responding to.

 “We assumed a 30 per cent illiquidity discount on the sale of land, accounting for Sh4.64 billion, therefore reducing value to Sh10.82 billion before accounting for liabilities,” said the report authored by research analyst Parshva Shah.  From REA Vipingo half-year 2013 results, the firm’s total liabilities stood at Sh701.81 million. This puts the value of the company at Sh168.72 per share or Sh10.12 billion without accounting for other assets.

Values the company

 The British Robinow brothers—Richard and Jeremy’s offer of Sh40 per share implies that Rea Vipingo, which owns about 69,448.96 acres, is worth Sh2.4 billion while that of investment firm Centum (Sh50) values the company at Sh3 billion.