Billionaire businessman Ngugi Kiuna is seeking the termination of the Carbacid Investments’ buyout of BOC Kenya after filing an objection to the deal at the Capital Markets Tribunal citing undervaluation.
Mr Kiuna, a former BOC Kenya chairman, said the Capital Markets Authority (CMA) erred in approving the takeover by ignoring the undervaluation of BOC besides disregarding the protection of interests of minority shareholders.
The tycoon, who holds 1.4 million BOC shares equivalent to a 7.6 percent stake, filed the appeal on March 1, 2021.
The legal action means that the buyout process, which was scheduled to close on April 6, 2021 will be put on hold until the issue is determined.
Carbacid and Aksaya Investments LLP, a firm controlled by its major shareholder Baloobhai Patel, have teamed up to offer BOC investors a buyout price of Sh63.5 per share or an aggregate of Sh1.2 billion.
“That the approval granted by the first respondent in respect of the proposed takeover offer by Carbacid Investments Plc and Aksaya Investments LLP to acquire up to 100 percent of the issued ordinary shares of BOC Kenya Plc be set aside in its totality for being invalid, null and void ab initio,” Mr Kiuna said.
The businessman laid out the grounds for his contention that Carbacid’s offer is inadequate. He said that as of December 31, 2020, BOC had Sh1.1 billion in cash and cash equivalents alone.
The company holds 14.8 million shares in Carbacid currently worth about Sh180 million. Mr Kiuna said that BOC has not revalued its freehold land and buildings at market rate, adding that they are grossly undervalued at the stated historical value of Sh46.4 million.
“The information presented in the [BOC] financial statements is incorrect, not up to date and misleading, with some entries having been exaggerated and others understated,” he said.
Dyer and Blair Investment Bank, the independent financial advisor hired by BOC to review Carbacid’s offer, said that the bid undervalued the company by 30.8 percent.
Dyer and Blair stated that BOC share was worth Sh91.76 a piece, valuing the firm at Sh1.7 billion. This is Sh552 million more than Carbacid’s total bid price of Sh1.2 billion.The board of BOC agreed with the investment bank’s assessment and told shareholders to make up their own mind with regard to the merits of Carbacid’s offer.This came after BOC’s majority shareholder, BOC Holdings, had already committed to sell its 65.38 percent stake to Carbacid at the Sh63.5 per share offer […]
