Dubai-based InvestAfrica FZCO has made a significant move on the Kenyan market by acquiring a 35-percent stake in Eveready East Africa, a Nairobi-based batteries distributor.
The deal was finalized with Sameer Group, an investment vehicle linked to the family of the late Kenyan tycoon Naushad Merali, as the group moved to unlock value from their investment in the group.
The strategic move comes at a time when buying interests in Eveready’s shares on the Nairobi Securities Exchange have been on the rise.
The renewed bullish sentiment surrounding Eveready’s shares on the local bourse has resulted in a near doubling of its share price, reaching Ksh1.13 ($0.0082) from Ksh0.65 ($0.000507) at the time of reporting.
As a result, the group’s market capitalization on the Nairobi Securities Exchange now exceeds $1.7 million.
According to a filing with the Capital Markets Authority, Eveready East Africa revealed that its major shareholder, East Africa Batteries Limited (EABL), will be selling its 73.4 million shares to InvestAfrica in a private transaction.
Although the terms of the deal, such as the price per share or the aggregate consideration, will remain undisclosed to the public, InvestAfrica does not intend to buy out the other shareholders.
Consequently, Eveready’s shares will continue to trade on the local bourse, as the Dubai-based firm has received an exemption from takeover rules.
While the price per share remains undisclosed, it is expected that the Naushad Merali family, as the sellers, will receive a premium above the prevailing market price, aligning with other privately negotiated transactions.
The anticipated entry of InvestAfrica as a strategic investor has prompted boardroom changes at Eveready, with representatives from Sameer Group being replaced by individuals appointed by the Dubai-based firm.
Eveready East Africa, known for its renowned brands like Eveready, Energizer, and Shick, has faced numerous disruptions in recent years. As a result, the company has shifted its focus to the Turbo brand of batteries, as sales have steadily declined, leading to significant losses that have eroded shareholder funds.
In the six-month period ending March 31, Eveready disclosed a larger loss of Ksh17.7 million ($129,000), primarily due to a sharp decline in sales from Ksh41.6 million ($301,000) to Ksh10.5 million ($76,100).