Billionaire investor Chris Kirubi. FILE PHOTO | NMG Billionaire investor Chris Kirubi is set to buy an additional 20 percent stake in Centum Investment Company in a deal worth Sh2.7 billion at a time the investment firm’s stock has hit a seven- year low.
This will mark the second major share purchase by Mr Kirubi, 79, who says that the company’s prevailing share price on the Nairobi Securities Exchange (NSE) continues to undervalue its true worth.
The businessman spent more than Sh1 billion between September 2013 and August 2015 to raise his stake in the company from the previous 24.99 percent to the current 30 percent.
He will seek to buy 133 million shares of Centum Investment, marking his first major deal in recent years as he continues to recover from a serious illness.
The announcement of the new share purchases comes after Centum’s stock dropped to a nearly seven-year low of Sh20.25 on Monday. This marks a 35 percent decline over the past 12 months alone.
The stock price is also a 72 percent discount compared to the company’s net asset value per share of Sh75.5, according to its financial results for the six months ended September 2019.
Mr Kirubi has said that he believes Centum shares should be valued north of Sh100 apiece.
“The public is hereby notified that … Capital Markets Authority has granted Christopher Kirubi an exemption from making a mandatory take-over offer in the event that the shareholder makes any acquisition of up to 49.99 percent of the ordinary shares of Centum,” Mr Kirubi said in a press notice.
This means that he only wants to raise his stake but does not intend to make an offer to take full ownership of the company.
The regulator requires investors who own more than a quarter of a Nairobi Securities Exchange-listed firm to state whether they intend to take full control when buying stocks equivalent to at least five per cent in it.
Mr Kirubi said he was allowed to buy the additional shares because his objectives are aligned with the regulator’s principles.He said his moves will result in significant demand for Centum’s shares and aid in price discovery, allow other investors to exit and enable him to raise his stake in the company.“The shareholder has been the holder of ordinary shares in the company for over 20 years and has, over time, acquired up to 30 percent of the ordinary shares of the company, as […]
