London headquartered multinational alcoholic beverage company Diageo plc has made an offer worth KES 22.73 Billion to acquire additional shares in its subsidiary East African Breweries Plc (EABL). The offer represents 14.97% of the issued share capital of EABL, which is listed on the Nairobi Stock Exchange.
In a tender offer seen by the Kenyan Wall Street, Diageo said it has served on East African Breweries PLC (EABL) notice of the intention to acquire up the additional 118,394,897 ordinary shares at an average price of Kenya Shillings (KES) 192.00.
The offer price is 39 per cent above EABL’s closing price of KES 138 on the Nairobi Securities Exchange on Thursday 13th October 2022. Over the last 52 weeks, EABL’s share price has traded in the range of KES 110 to KES 172.
Diageo is already the majority controlling shareholder of East African Breweries (EABL) and currently holds 395.61 Million ordinary shares of EABL which represents 50.03% of the issued share capital of EABL. If the offer goes through, Diageo will will hold 514.003 Million ordinary shares in EABL which would represent sixty-five per cent (65%) of the issued share capital of EABL.
Diageo doesn’t intend to delist EABL
Diageo has also disclosed that it doesn’t intend to delist East African Breweries (EABL) from the Nairobi Securities Exchange. The company says that it believes the interests of EABL shareholders and the broader public would be best served by EABL remaining a publicly listed company and available to be invested in by the Kenyan public.
Diageo also notes that its indirect shareholding in EABL of 50.03% is lower than the average shareholding of approximately 66.9% held by multinational parent companies in listed subsidiaries in Kenya.
“It also lower than the average shareholding for other listed subsidiaries of Diageo in Africa such as in Guinness Nigeria and Guinness Ghana Breweries Limited where Diageo indirectly hold 58.02% and 80.4% stake, respectively.” Diageo noted in a statement.
Once all the necessary approvals have been obtained from the Capital Markets Authority, the tender offer will open on 30th January 2023 and will be open to holders of ordinary shares on the register of EABL on 16 January 2023.
EABL’s Financial Performance
East African Breweries PLC (EABL) profit for the full year ended June 2022 rose by 124 per cent to KES 15.6 billion. The brewer’s net sales for the period rose by 27 percent year on year to KES 109.4 billion. During the period, the company’s board recommended final dividend of Kshs 7.25 per share (interim Kshs 3.75 per share), bringing the total dividend for the year to Kshs 11.00 per share.
About Diageo
Diageo Plc is headquartered in London, England and has a primary listing on the London Stock Exchange and Secondary listing on the New York Stock Exchange and through its subsidiaries, joint ventures and other investments operates in multiple other African countries offering various alcoholic and non alcoholic beverages to consumers around the world.
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