The decision comes after an independent adviser hired to review the transaction declared that Carbacid’s offer to buy the company at Kes 63.5 per share undervalues the industrial and medical gases manufacturer by 30.8 %.
Dyer & Blair Advice to BOC
Dyer and Blair Investment Bank wrote to the company’s board, stating that the company has a fair value of Kes 91.76, which is an aggregate of Kes 1.7 billion.
The investment bank settled on the fair value of Kes 91.76 as a middle ground after applying various methods that gave a value range from kes 61.55 to kes 127.4.
The company has since responded to Dyer and Blair’s opinion by telling its shareholders that it will not tell them whether or not to sell their shares to Carbacid, leaving the shareholders to decide on the final option on weather to accept or reject the offer.
“Having carefully considered the opinion of the independent adviser … the board unanimously agrees that the price of Kes 63.5 does not reflect a fair value of the company,” BOC says in a circular to shareholders.
This comes after Carbacid Investments Plc’s (CIL) shareholders approved the acquisition of up to 100 per cent of BOC Kenya Plc (BOC). The proposal was voted upon and approved at Carbacid’s 49th annual general meeting of the shareholders.
However, despite the controversy, Carbacid plans to continue with the buyout and intends to purchase as many BOC shares as will be made available at the Kes 63.5 per share offer price.
The company has however warned potential disagreeing shareholders that they could face compulsory buyout or retain stakes in a company whose shares do not trade on the NSE should Carbacid hit ownership thresholds allowing it to delist the medical gases manufacturer or squeeze out its minority investors.
This offer is NOT conditional as to acceptances. This means that its success does not depend on the offerors achieving a given level of acceptances,” BOC says in the circular.