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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