Kirubi will be raising his portfolio in the company from current Sh4 billion to Sh5.03 billion worth in shares, which translates to over 25 per cent stake in the company. That will make him the biggest shareholder in the company, replacing the founding shareholder, Industrial and Commercial Corporation (ICDC), which has cut down its shareholding to 22.9 percent.
In the notice for the acquisition of the stake, Kirubi stated that he had no interest in taking full control of the company. And thanks to this disclaimer, he has been granted the go ahead for the acquisition by the market regulator, the Capital Markets Authority. Earlier in the year, Kirubi tested the waters by buying sharesworth Sh86 million in the same company.
Although he says he is not taking over the company, Kirubi’s influence in the company is likely to growtremendously. His vote at the board will no doubt have a veto effect on just about everybody else. His influence will not just be in Centum but also in the listed companies where Centum has an interest as well as in theprivate companies where the firm is a shareholder.
Centum has substantial share-holding in soda bottling, Safaricom, Kenya Commercial Bank and Longhorn Publishers, among others. The intended acquisition of the majority stake in Centum is vintage Kirubi style. Since he landed on the investment markets, he has earned a reputation as an aggressive investor who will not do things in halves.
Before he offloaded his stake in the earlier part of the year, Kirubi was the biggest individual shareholder in Kenya Power and Lighting Company (KPLC), now rebranded Kenya Power. The same with Uchumi Supermarkets before it fell under receivership in 2006. But it is not just in listed companies that he buys big into.
In UAP Insurance, one of the biggest insurance companies in East Africa, Kirubi is second to only Joe Wanjui, the indigenous pioneer shareholder in the firm. The same is the case in East African franchise for German courier firm DHL, which he privately owns. Where other investors prefer small shareholdings in private companies and then accumulate it over time, Kirubi has no qualms buying out the owners of a company completely out of their businesses at the first instant.
In the 1990’s, Dutch multinational trading house Hagemeyers NV, was in the process of reinventing itself. The owners of the company decided to set up manufacturing concerns to remain in business. It is this decision that gave birth to Haco Industries in Kenya in 1974. At the beginning, Haco Industries established itself in the manufacture of cosmetics and other personal hygiene products. It also did some import and export businesses.
In the 1980’s, Haco Industries parent company Hagemeyers was going through difficult times over the decision to go into manufacturing. To save the company from bankruptcy, a decision was made to let go of all its manufacturing businesses. In line with that decision, Haco Industries had to be let off. For Kirubi, this was a perfect opportunity to get into manufacturing.
He made his bid and snapped up 100 percent shareholding in the company. Immediately he changed Haco Industries main focus from manufacture of cosmetics to manufacture of stationery. The company that was on the verge of collapse suddenly became the region’s market leader in school stationery. His entry in media business was much in the same style. In 1996, Linda Holt, a veteran publicist had started Capital FM.
The plan was to offer the English audience in Kenya with an alternative from the state-owned Kenya Broadcasting Corporation’s General Service. But the Holt experiment backfired. Because it was seen as an expatriates radio, very few advertisers were ready to place adverts there.
With poor revenues, staff went for long without pay, and rent for its offices at the 19th floor of Lonrho House were beginning to run into arrears. Kirubi then made his bid and acquired 100 percent stake in the station. With the acquisition, Linda was kicked out of management and Kirubi took effective control. He has never regretted the acquisition that exceeded it’s worth to give him a new career as radio DJ.
– The People
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