Carbacid Chairman Dennis Awori last week argued that the offer was fair and represents a “realistic underlying value of BOC Kenya. [Courtesy] Like a cornered hunter, BOC Kenya is refusing to go down easily ahead of an impending Sh1.2 billion buyout by Carbacid.
This amid a war of words after BOC made startling claims that the latter undervalued the firm as the hunter becomes the hunted in an ironic twist of fate.
Some 15 years ago, BOC made a takeover bid on Carbacid but failed after a four-year regulatory battle.
A crestfallen BOC would return share certificates it acquired from shareholders of Carbacid. Read More
But Carbacid, in partnership with Aksaya Investments, made a joint Sh1.2 billion bid four months ago to acquire the 100 per cent issued shares of BOC.
The deal, set to birth a giant industrial gas business, appears to have underlying issues ahead of a 30-day offer period that expires on April 6.
BOC is a supplier of industrial, medical and special gases, while Carbacid produces food-grade carbon dioxide that is used in fizzy drinks.
Both firms control the largest market shares in their respective areas. BOC has seen a peak in business, with oxygen currently in high demand in the fight against Covid-19.
Its main products include oxygen, nitrogen and dissolved acetylene, which are used in hospitals.
Last month, the BOC Kenya Board refused to recommend the offer for acceptance by shareholders, citing the opinion of an independent financial adviser. Dyer and Blair put the “fair” value of BOC at Sh91.76 billion, which is 44.5 per cent higher than the offer price.
“As the fair value is below the offer price, the offer price is not considered to be fair and reasonable,” said Dyer and Blair. This has fired up the board and some minority shareholders. The board, however, noted that the offer was not conditional to the conclusion of the deal.“This means that its success does not depend on the offeror achieving a given level of acceptances,” said the board.This is because the offerors already have the blessing of BOC Kenya’s majority shareholder, which is the UK-based BOC Holdings with a 65.38 per cent stake. However, Carbacid’s analysis paints the picture of a firm on its knees. Carbacid Chairman Dennis Awori last week argued that the offer was fair and represents a “realistic underlying value of BOC Kenya and one that will allow us to invest in the rejuvenation of the company […]
