Tribunal picked to hear REA Vipingo takeover bid

Sisal plantation

High Court halted the buyout of Africa’s biggest sisal producer after Centum challenged the validity of an offer by REA Trading Limited, the plantation firm’s biggest shareholder

Capital Markets tribunal will be constituted for the first time later this month, when it will set a date for a hearing into the takeover of REA Vipingo Plantations Limited, Chairman Jinaro Kibet said.

The tribunal expects to decide on the timing of the hearing after July 26, when one of the members who is currently out of the country returns to Kenya, Kibet said in a telephone interview yesterday from the capital, Nairobi.

The Government appointed two members to the arbitrator earlier this month to form a quorum.
Kenya’s High Court halted the takeover of Africa’s biggest sisal producer on May 21, after Centum Investment, Kenya’s largest publicly traded investment company, challenged the validity of an offer by REA Trading Ltd, REA Vipingo’s biggest shareholder with a 57 per cent stake.

Centum argues that UK- based REA Trading’s offer contains a “contingency” that violates Kenya’s Companies Act, according to the appeal submitted to the tribunal.

REA Trading has proposed buying the 43 per cent of REA Vipingo it doesn’t already own for Sh70 a share.

It also said shareholders that accepted the offer would be entitled to a pro-rata share of dividends or distributions of proceeds from the potential future sale of land for as much as Sh15 per share.
Centum is offering Sh75 a share for the company.

Earlier this month, the Court of Appeal upheld a High Court decision denying Vania Investment Pool Ltd, a closely held Kenyan company, from bidding for REA Vipingo after it missed a February 28, offer deadline.

Vania is consulting its lawyers about the decision, Dilesh Bid, a director of the company, said by phone July 14. He declined to comment further.

Market Value REA Vipingo was suspended from trading on the Nairobi Securities Exchange after REA

Trading made an initial cash offer to acquire the company. The stock last traded on November 13, at Sh27.50, giving the company a market value of Sh1.65 billion ($19 million).

REA Vipingo operates two sisal estates in Kenya that produce about 12,000 metric tonnes a year of the fiber.

Three of the company’s estates in Tanzania produce more than 7,500 tonnes, according to its website.

— Bloomberg