Diageo Plc’s Kenyan unit has completed the partial tender offer to increase its aggregate equity stake in East African Breweries from 50.03% (395.6 million shares out of 790.8 million outstanding shares) to 65%.
The offer, worth Ksh 22.73 billion, was made in October 2022.
Diageo Kenya received valid tenders from 1,697 shareholders, amounting to 143.5 million Ordinary Shares in two phases of the tender offer. This resulted in an oversubscription rate of 121.2%. Diageo Kenya accepted the maximum of 118.4 million Ordinary Shares as specified in the tender offer.
EABL Tender Offer Results
|Shares accepted under the Guaranteed Allocation Pool (mn)||Shares accepted under the Early acceptance Pool (mn)||Shares accepted under the Final Allocation Pool (mn)||Total Shares (mn)|
|Total Shares Accepted for purchase||8.0||55.0||55.4||118.4|
Source: Diageo Plc website, NSE
“The move by Diageo Kenya to increase its shareholding in EABL affirms the importance of EABL to the larger Group and confidence in its future growth despite the challenging macroeconomic environment occasioned by elevated inflationary pressures and the government’s decision to increase excise taxes,” notes Cytonn Investments.
East African Breweries PLC posted a Profit After Tax of Kshs 15.6 billion and Kshs 8.7 billion in FY’2022 and H1’2023, respectively.
Additionally, earnings per share increased by 172.2% to Kshs 15.0 in FY’2022, from Kshs 5.5 in FY’2021 and earnings per share increased by 2.1% to Kshs 17.3 in H1’2023, from 16.9% in H1’2022.
Further, the EABL board of directors announced a total of Kshs 11.0 dividend per share in FY’2022, translating to a dividend yield of 6.4%, and lately recommended an interim dividend of Kshs 3.75 in H1’2023.
“As such, we expect this to continue boosting investor confidence in the Group’s stock, which has recorded a YTD gain of 0.4%,” adds Cytonn.