CMA defers takeover of Limuru Tea

Tuesday, August 9th, 2022 01:33 | By
Tea plantation. PHOTO/Courtesy

Dutch firm Puccini Bidco will have to wait longer before acquiring Limuru Tea after the Capital Markets Authority (CMA) postponed a decision to approve the takeover.

The Netherlands-based firm had offered to acquire 100 per cent of Limuru Tea, after an earlier bid for a 52 per cent stake was rejected by smaller shareholders. On July 4, 2022 Puccini Bidco B.V. operating under the local entity Ekaterra Kenya served Limuru Tea with notice of intention to acquire up to 100 per cent of the firm’s ordinary shares.

In an announcement posted on the Nairobi Securities Exchange (NSE) portal, shareholders were yesterday informed that the deal had been deferred by the regulator until further notice.

“Shareholders of Limuru Tea and the investing public are advised to note that the timelines envisaged under the takeover regulations for the publication of the offeror’s statement and offer document remain suspended until further notice,” said Dorcas Muli, the board of director’s chair, Limuru Tea. No reason was given for the postponement.

Additional shares

In accordance with regulation 4(4) of CMA- Take-overs and mergers regulation 2002, Limuru Tea expected to receive Ekaterra Kenya’s statement on or before July 15, 2022. The statement had to be approved by the CMA before it was served. 

Under the deal, Ekaterra Kenya will only acquire additional shares from those shareholders who express their wish to realise their investment in Limuru Tea by selling their shares to Ekaterra Kenya.

Ekaterra Kenya has not set a minimum acceptance threshold for delisting Limuru Tea from the NSE. However, should it acquire 75 per cent or more, Limuru Tea will not meet the required conditions for remaining listed, a move that will prompt Ekaterra to delist the firm, subject to CMA approval.

Puccini, a special purpose investment vehicle majority owned by the CVC Partners had last year disclosed that it did not intend to buy the entire Limuru Tea but only interested in the 52 per cent stake owned by Unilever, the latter which did not disclose their offer price. 

The move was, however, contested by smaller investors who went to court to block the sale.   

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