This research report was prepared by the Research Department of Old Mutual Securities Limited. Old Mutual Securities Limited is a securities trading company licensed by the Capital Markets Authority (Kenya) for the purpose of facilitating trade on the Nairobi Securities Exchange.

Here are our views on the news making headlines today for Kenya:
Centum signs sweetheart deal with UK duo for Vipingo land. The deal will see Centum acquire 10,546 acres of prime Rea Vipingo land for KES 2 billion in exchange for withdrawing its rival bid. The settlement allows Richard and Jeremy Robinow, whose investment vehicle REA Trading already owns 57% of Rea, to proceed with their offer to buy out the company at a price of up to KES 85 per share and de-list it from the stock market.

Our View: We believe this Short- to medium-term milestones will enhance capital appreciation and this news augurs well for the company as the Rea Vipingo buyout has stalled for more than a year, with the two parties engaging in bidding wars and litigation at the High Court and the CMA tribunal. The company strategy for the next 5 years is to develop, scale and grow investment capabilities in 8 new sectors, Agriculture, Education & Health, Energy, Financial Services, FMCG and ICT and further grow their existing Real Estate investments which
portends well for the company’s performance going forward. Centum intends to generate 35%+ annualized return over the strategic period (2015-2019) and grow its Total Assets KES 120Bn [USD 1.38Bn] by 2019.

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