Seaboard Corporation’s acquisition bid of Unga Group denied

Seaboard Corporation’s acquisition bid of Unga Group denied
Sophie Chapman
The Delaware-based agribusiness conglomerate, Seaboard Corporation, earlier this week sought to acquire an additional 46.1% stake in Unga Group, a flour milling firm. Seaboard currently owns a 2.92% stake in the company, and is aiming to raise that 49%. The acquisition request was denied by minority shareholders on the grounds that it would undervalue Unga Group by Sh701.5mn (US$6.9mn). The American company’s offer would value Unga at Sh3bn ($29.7mn), at Sh40 ($0.40) per share. This falls 18.8% lower than the Nairobi Securities Exchange-listed firm’s value of Sh3.7bn ($36.6mn), or Sh49.2 ($0.49) per share. SEE ALSO: “This offer undervalues Unga and we are going to reject it,” commented Karim Jetha, the Managing Director of Sayani Investments, a firm with 800,000 shares in Unga Group. According to Mr Jetha, Sayani Investments and other shareholders are considering options, including a rival bid and court. Some of Unga’s most valuable assets, including its leasehold land, have not been revalued since 2013, suggesting its market price could have grown since. “The leasehold land was revalued as at June 30, 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Sh878.5 million,” the company’s latest annual report stated.
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