CENTUM INVESTMENT AND REA TRADING SETTLE REA VIPINGO PLANTATIONS TAKEOVER STALEMATE

Centum Investment Company Limited (“Centum”) and REA Trading Limited (“REAT”) have entered into a settlement agreement in relation to their two competing bids for takeover of Rea Vipingo Plantations Limited (“RVP”). REAT initially made a takeover offer to acquire all issued ordinary shares of RVP on 25th April 2014 while Centum made a competing takeover offer on 2nd May of the same year.
Centum subsequently filed an appeal before the Capital Markets Tribunal on 9th May 2014 challenging the decision by the Capital Markets Authority to approve REAT’s offer. The High Court issued an injunction blocking the takeover of Rea Vipingo as a result. The two competing parties entered into talks aimed at breaking the stalemate and came into a settlement agreement with the following salient features:
Centum acquires 9,646 acres of land in Vipingo at a price of KES 180,000 per acre and RVP’s subsidiary Vipingo Estates Limited which owns approximately 900 acres of land at a price of approximately Kes.340 million. The transaction prices totals to approximately KES 2.1 billion. According to the latest valuation commissioned by RVP, the market value of the land is KES 175,000 per acre;
Centum withdraws its takeover offer of RVP Limited and its appeal against the bid made by REAT before the CMA tribunal;
REAT will proceed with its takeover bid and it has indicated it will pay the full amount of an additional cash top-up of KES.15 per share, which together with its offer price of KES.70 per share, makes the total offer to RVP shareholders KES 85 per share.; and
RVP will keep ownership of and continue harvesting all the sisal currently growing on the land over its lifespan while areas with mature sisal that has been harvested will be available to Centum.
The proposed sales of land and RVP’s subsidiary, Vipingo Estates Limited, are subject to the shareholders of RVP passing an ordinary resolution at a general meeting to be held on 28th April
2015. REAT (which controls 57% of the issued shares of RVP) has undertaken to Centum to vote in favour of the resolution.
Speaking about the settlement, Centum CEO, James Mworia said, “The agreement reached is a win-win for all parties involved especially RVP shareholders who will benefit from the increased offer price of KES 85 and will therefore realize a higher price for their investment. Centum shareholders will also benefit from the acquisition by their company of a prime parcel of land in Vipingo.”

Gone from 27 to 85 in 18 months?

Notice of Extraordinary General Meeting

Notice is hereby given that an Extraordinary General Meeting of the company will be held at Southern Sun Mayfair Hotel, Parklands Road, Nairobi on Tuesday 28th April 2015 immediately after the conclusion of the Annual General Meeting to be held at the same venue commencing 10.00 a.m. on the same date.

Agenda

As special business

To consider and, if thought fit, to approave the following resolution as a Special Resolution of the company.

That, for the purposes of paragraphs G.06(b) and G.06(c) of the Fifth Schedule to the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations, the proposed Sale of (i) the subsidiary of the Company, Vipingo Estate Limited to Centum Investment Company Limited and (ii) the land owned by the Company at Vipingo to Vipingo Development Limited be and is hereby approved.

By order of the board,

I.R. HODSON
Secretary
27 March 2015

what is the process of taking up the offer.

what if i refuse to take up the brothers offer,can i remain a minority shareholder of rea vipingo ?

The shareholders of Access Kenya, CMC etc who never took up the offers tell us what happens after delisting.

Capital Gains Tax Implications
Consequently, REAT, having taken the advice of both its Legal Adviser and Sponsoring Broker, has taken the view that if at the time payment for the RVP shares are to be made to the RVP shareholders who have accepted the Offer, the appeal by KASIB (Petition No 22 of 2015 KASIB v KRA & another ) has not been heard and determined in substance by the Court of Appeal, or if no appeal is lodged by KASIB, or if the current laws governing CGT have not been amended, then REAT shall, in accordance with the law as it currently stands:

a) Pay individual RVP shareholders net of CGT as provided for in the Income Tax Act. The CGT due on account of these shares shall be calculated in accordance with the mechanism for determining the base cost set out in the Guidelines issued by the KRA in January 2015.

b) Pay corporate RVP shareholders gross of CGT, leaving them to account for CGT themselves, in accordance Income Tax Act.

Should the law change in the intervening period, that is, prior to the payment date for the Offer, scheduled for 17thJune 2015, all Agents shall be updated by the Sponsoring Stockbroker regarding any consequent change to the CGT treatment on the share transfers for the RVP shares.