Listed brewer EABL is set to spend Sh426 million to buy out minority shareholders in its subsidiary Uganda Breweries Limited (UBL) through a tender offer that opened on Tuesday.
EABL, which owns a 98.19 percent stake in the Ugandan brewer, said in a notice on Tuesday that it will seek to purchase the remaining 1.81 percent stake or 2.18 million shares at a price of Ush5,630 (Sh195.42) each.
The pricing values the Ugandan unit at Sh23.51 billion. EABL’s present stake in UBL is, therefore, valued at Sh23.12 billion.
EABl said the tender offer will run until March 3, 2025, and is open to shareholders of UBL who were on the books as of September 2.
“The tender offer will be on a “willing buyer, willing seller” basis, with no element of pressure on shareholders who do not wish to sell,” said EABL in the notice. “The price payable for each ordinary share tendered in the tender offer is USh5,630 per share.”
UBL is one of four EABL subsidiaries —out of 12 in total— in which the brewer does not have a 100 percent holding.
Others where the holding is partial include Serengeti Breweries Limited in Tanzania (92.5 percent), UDV (Kenya) Limited (46 percent) and East African Beverages (South Sudan) Limited (99 percent).
In pursuing the buyout of the minority stake in UBL through a tender offer, EABL is following in the steps of its British parent Diageo which bought an extra 14.97 percent stake in the firm in March last year.
Diageo, which executed the acquisition through its wholly owned subsidiary Diageo Kenya, saw its stake rise from 50.03 percent to 65 percent after buying the additional 118.4 million shares in the brewer at a cost of Sh192 per unit, valuing the deal at Sh22.7 billion.
The decision to purchase additional shares, according to Diageo, was inspired by EABL’s improved returns to investors and growing market share in the country.
The sale was done in two phases from February 6 to 24, 2023 and between February 27 and March 17, 2023, with both phases posting oversubscription.
