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US company confident on Unga buyout

Nairobi, Monday

US firm Seaboard Corporation is confident of buying out three quarters of minority shareholders in Unga Group to allow it to eventually delist the agro-processor  from Nairobi Securities Exchange.

The diverse multinational agribusiness and transportation conglomerate 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.

It needs to purchase three quarters of that total to be able to take Unga private. The rest of the shares are owned by a local group of investors via a vehicle called Victus Ltd, which supports Seaboard’s goal of buying out the minority shareholders and eventually delisting the firm.

Market participants said 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.

Seaboard has offered to pay Sh40 ($0.3970) per share, representing a 31.75 per cent premium on the shares’ 250-day weighted average price. Unga’s current market capitalisation is around Sh3 billion ($30 million), according to Reuters data.

The offer closes tomorrow. “Our interest in Unga Plc is an effort to deepen our presence across targeted markets in sub-Saharan Africa,” said Hennie Combrink, Seaboard’s vice president of international business development and finance.

“Africa is part of Seaboard’s core business model. We have been here since the 60s and the continent remains an important part of our business portfolio.”

Sea Board is currently one of the largest companies engaging in pork production and processing and ocean transportation. In Africa, the company has operations in a number of companies that are engaged in commodity merchandising, grain processing and sugar production.  –REUTERS and CORRESPONDENT

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