Unga Group will be delisted from the Nairobi Securities Exchange if the takeover bid by Seaboard of the US goes through. If the take-over is approved, Seaboard will propose that the shares of Unga be de-listed from the Nairobi Securities Exchange.
Unga’s shareholders who do not wish to accept the take-over offer and whose shares are not acquired will remain minority shareholders in the unlisted company, thereby limiting the liquidity in the trading of their shares.
“Unga shareholders shall at the appropriate time be notified of an extraordinary general meeting of the shareholders to discuss, and if thought fit, approve the de-listing of shares of Unga from the Nairobi Securities Exchange, subject to the take-over offer being successful,” Seaboard says in its offer document submitted to the Capital Markets Authority and the Nairobi Securities Exchange.
According to the terms of the proposed take-over offer each shareholder of Unga will be offered Ksh40 for each ordinary share of Unga. According to the Offeror’s Statement, this offer price represents a premium, as of 6th February 2018 which was the last business day practicable prior to the submission of the Notice of Intention (the “Value Date”).
If all Unga minority shareholders accept the offer, Seaboard expects to pay approximately Sh1.397 billion. According to the Offeror’s Statement, CBA Capital Limited, Seaboard’s financial advisor and sponsoring broker has confirmed that Seaboard has sufficient resources and facilities at its disposal to satisfy full acceptance of the Take-over Offer
SEE EXERPTS OF THE OFFER BELOW
Introduction
The Board of Directors of Unga Group PLC (“Unga”) have, on 20 February 2018, received an Offeror’s Statement pursuant to Regulation 4(4) of the Take-over Regulations from Seaboard Corporation (“Seaboard”), acting in concert with Victus Limited (“Victus”), in respect of the proposed acquisition by Seaboard for all the 46.15% of the issued ordinary shares of Unga not already held by Seaboard and Victus as at the date thereof (the “Take-over Offer”).
Seaboard proposes that the Unga ordinary shares will be acquired free from all liens, charges, encumbrances and other interests and together with all rights now and hereafter attaching thereto including the right to receive all dividends and other distributions hereafter declared, made or paid after the date of the Offeror’s Statement.
The terms of the proposed Take-over Offer are that each shareholder of Unga will be offered forty Kenya Shillings (KES 40.00) for each ordinary share of Unga.
According to the Offeror’s Statement, if the Take-over Offer is declared by Seaboard to be unconditional in all respects, Seaboard intends to propose that the shares of Unga be de-listed from the Nairobi Securities Exchange.
Seaboard is a vertically integrated conglomerate operating primarily in agribusiness and transportation. In the United States of America (“USA”), Seaboard is currently one of the largest companies engaged in pork production and processing, and also, owns a 50% stake in the largest vertically integrated turkey producer and processor in the USA, Butterball, LLC. Overseas, Seaboard operates in Africa and Latin America through milling operations primarily for commodity merchandising, grain processing and sugar production. Seaboard also has an electric power generation company in the Dominican Republic, a significant Marine division and several agricultural based operations.
Existing Interest of Seaboard in Unga
As at 30 June 2017, the issued share capital of Unga comprises 75,706,986 ordinary shares of KES 5.00 each, all of which are voting shares. Seaboard holds indirectly 2,210,400 ordinary shares of KES 5.00 each in Unga (representing 2,92% of the issued share capital of Unga), currently held as nominee through CFC Stanbic Financial Services Limited, and is acting in concert with Victus Limited which holds 38,557,190 ordinary shares of KES 5.00 each in the company (representing approximately 50.93% of the issued share capital).
Undertakings and persons acting in concert
According to the Offeror’s Statement, Victus, which currently holds a 50.93 per cent majority stake (38,557,190 ordinary shares) in Unga, has irrevocably undertaken to support the Take-over Offer as a concert party and does not wish to increase its present shareholding. Aside from this undertaking, according to the Offeror’s Statement, neither Seaboard, nor Victus, or any related company or person associated with the Seaboard, has received an undertaking to accept the Take-over Offer from any holder of ordinary shares of Unga.
Agreements with directors
According to the Offeror’s Statement, save as regards the irrevocable undertaking of Victus to support the Take-over Offer (as described above), there is no agreement between Seaboard and any director of Unga in connection with or conditional upon the outcome of the Take-over Offer nor is it proposed in connection with the Take-over Offer that any payment or other benefit be made or to be given to any director of Unga or of any company related to it as consideration for, or in connection with, such director’s retirement from office.
Compulsory acquisition and delisting of Unga
As noted above, according to the Offeror’s Statement, if the Take-over Offer is declared by Seaboard to be unconditional in all respects, Seaboard intends to propose that the shares of Unga be de-listed from the Nairobi Securities Exchange.
Unga’s shareholders who do not wish to accept the Take-over Offer and whose shares are not acquired in the circumstances provided in section 210 of the Companies Act (Cap 486) will, in such an event, remain minority shareholders in an unlisted company, thereby limiting the liquidity in the trading of their shares.
Unga shareholders shall at the appropriate time be notified of an extraordinary general meeting of the shareholders to discuss, and if thought fit, approve the de-listing of shares of Unga from the Nairobi Securities Exchange, subject to the Take-over Offer being successful.
The terms and conditions of the Take-over Offer
The terms of the proposed Take-over Offer are that each shareholder of Unga will be offered forty Kenya Shillings (KES 40.00) for each ordinary share of Unga. According to the Offeror’s Statement, the forty Kenya Shillings (KES 40.00) offer price represents a premium, as of 6th February 2018 which was the last business day practicable prior to the submission of the Notice of Intention (the “Value Date”).
The total consideration for the Take-over Offer, assuming Seaboard receives acceptances from all the Unga minority shareholders, is estimated to be approximately KES 1.397 billion. According to the Offeror’s Statement, CBA Capital Limited, Seaboard’s financial advisor and sponsoring broker has confirmed that Seaboard has sufficient resources and facilities at its disposal to satisfy full acceptance of the Take-over Offer.
