Seaboard fails to buy out Unga Group’s minority shareholders

New York Stock Exchange-listed firm Seaboard Corporation has failed to buy out the minority shareholders in Kenyan food processing firm Unga Group Plc, Reuters reported yesterday.

Seaboard did not reveal more details about the failure, promising to comment on the outcome of the offer at a later date.

The failure by Seaboard comes more than a month after it received a 10 day offer extension period from Capital Market Authority, asking minority shareholders in Unga Group to take up the offer before it closes on June 28.

It attributed the extension to a document delivery hitch that led to relocation of shareholders whose new details were not updated with the Central Depository and Settlement Corporation.

The firm’s pledge to extend the offer came just a week after it expressed confidence of meeting its target and delisting Unga Group from Nairobi Securities Exchange.

Neither Seaboard nor CMA issued any statement about the status of the offer even after the deadline lapsed three weeks ago.

The US firm offered in February to buy the 46.15 per cent of Unga’s shares that are held by minority shareholders and listed on the Nairobi bourse. This was to lift its shareholding to 49 per cent.

The rest of the shares are owned by a local group of investors via a vehicle called Victus Limited, which supports Seaboard’s goal of buying out the minority shareholders and eventually delisting the firm.

Seaboard, which had about two per cent of Unga before the offer with Victus which has a 50.93 per cent stake, needed to acquire 75 per cent of the total issued share capital to turn Unga Group in a private entity .

The US conglomerate and its allies managed to secure control of 70 per cent of the company after the offer, which was priced at Sh40, a 31.75 per cent premium on the shares’ 250-day weighted average price.

Market participants told Reuters that Unga, whose businesses range from wheat and maize milling to baking and animal nutrition products, faced growing competition from unlisted companies, hence the desire to also take it private and operate on a similar footing.

Yesterday, Unga Group’s share continued its three month stagnation, closing the day at Sh39.25. Reuter estimates Unga’s current market capitalization is around Sh3 billion.