Kirubi to Acquire Larger Chunk of Centum

Esther Macharia | Mar 24, 2020

In a deal worth Ksh 2.7 billion, Chris Kirubi is set to buy an additional 20% stake in Centum Investment Company. Kirubi is already the largest shareholder in the firm, whose price stock is currently the lowest it has been for 7 years.

Between September 2013 and August 2015, Kirubi spent more than Ksh 1 billion aiming to raise his stake to his current 30% from 24.99%.

The purchase of 133 million shares of Centum will be his first major deal in the recent past.

This purchase was after Centum's stock dropped to Ksh 20.25, the lowest in nearly 7 years.

Compared to its net value of Ksh 75.5 recorded as the results for the six months in September 2019, this value is a 72% discount. Kirubi believes the shares should be valued at nothing less than Ksh 100 apiece.

The Capital Markets Authority has approved the acquisition and exempted Kirubi from making a mandatory takeover offer to other investors. The regulator requires investors who own more than a quarter of any listed firm to state their intentions when purchasing more than 5% equivalent of stock. Kirubi said he was allowed to buy additional shares as he was in line with the regulator's principles.

He added the move was to increase demand in Centum shares, aid price discovery, allow other investors to exit and to raise his own stake in the company.

Kirubi is not the only high profile member of the firm buying shares, with James Mworia, Centum's chief executive, having spent north of Ksh 200 million since 2015 to acquire shares that are now valued at Ksh 114 million.

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