R.E.A. Trading Ltd has received regulatory approval to acquire all the listed shares in REA Vipingo Plantations Ltd. This follows a settlement agreement between Centum Investment Company Limited and R.E.A Trading, and by way of a consent order of the Capital Markets Tribunal.
Announcing the resumption of the offer, Mr Richard Robinow, the chairman of R.E.A. Trading, said that the settlement was underpinned by a desire to resolve the matter in a manner that best serves interests of the firm’s shareholders. “We are delighted by this new development,” he said. “We hope that the other shareholders of REA Vipingo Plantations will support our bid. We are determined to continue with sisal farming after successful conclusion of the offer to maintain the firm’s position as the leading sisal producer in East Africa. R.E.A. Trading has been a long-term investor in REA Vipingo Plantations and has a proven track record in managing plantations across the world.”
Under the settlement, Centum will acquire 9,676 acres of land at Vipingo owned directly by REA Vipingo together with its fully owned subsidiary, Vipingo Estate Limited that owns a further 900 acres of land at Vipingo at a cost of Ksh2.066 billion payable over two years. The proposed sales to Centum will be submitted to the shareholders of the company for approval at a general meeting convened for the 28th April 2015.
R.E.A. Trading Limited is offering shareholders of REA Vipingo Plantations Limited a premium offer price of Ksh70 per share. In addition, shareholders who accept the R.E.A Trading offer will be entitled to a cash top-up of Ksh15 per share payable immediately after the closing date.
Accordingly, R.E.A Trading has decided that immediately after the closing date of the offer and in line with its offer document, it will make an election to pre-pay the cash top-up in full.
“We are not real estate people and have no expertise in real estate development but we do understand the sisal business and its heritage, backed by 30 years of experience. The expansion of the group’s business into new areas will require RVP to commit new capital to diversification and to take significantly greater financial risks than it has hitherto assumed. It would be easier to do this if the group’s operations were privately held,” said Mr Robinow.
