Listed brewer EABL is set to spend Sh426 million to buy out minority shareholders in its subsidiary Uganda Breweries Limited (UBL) through a takeover bid that opened on Tuesday.
EABL, which owns a 98.19 percent stake in the Ugandan beer company, said in a filing on Tuesday it would seek to buy the remaining 1.81 percent stake or 2.18 million shares at 5,630 Ugandan shillings (195.42 shillings) per share.
The Ugandan unit is valued at about Sh23.51 billion. Therefore, EABL’s current stake in UBL is estimated at about Sh23.12 billion.
The offer will run until March 3, 2025, and is open to UBL shareholders who were on the books as of September 2, EABl said.
“The offer will be made on a ‘willing buyer and willing seller’ basis, without any element of pressure on shareholders who do not wish to sell,” AAPL said in the notice. “The price payable for each ordinary share being offered in the offer is Sh5,630 per share.”
UBL is one of four EABL subsidiaries – out of a total of 12 – in which the company does not own 100 percent.
Other companies with partial ownership include Serengeti Breweries Limited in Tanzania (92.5 per cent), UDV (Kenya) Limited (46 per cent), and East African Beverages (South Sudan) Limited (99 per cent).
In seeking to buy the minority stake in UBL through a tender offer, EABL follows in the footsteps of its British parent company Diageo, which bought an additional 14.97% stake in the company in March last year.
Digio, which executed the acquisition through its wholly owned subsidiary Digio Kenya, saw its stake rise from 50.03 per cent to 65 per cent after purchasing an additional 118.4 million shares in the company at a cost of Sh192 per unit, valuing the deal at Sh22.7 billion.
Digio said the decision to purchase additional shares was a result of EABL’s improved returns to investors and growing market share in the country.
The sale process was carried out in two phases from February 6 to 24, 2023 and from February 27 to March 17, 2023, with both phases recording oversubscription.