More details on the Scangroup sale of a controlling stake to the WPP Group (UK) are out now. The mechanics will involve:
- Investment of Kshs. 1.325 billion [~$18.2 million] into Scangroup (with Kshs. 400 million for working capital, Kshs. 650m for acquisitions, and 30% for in-house improvements including new ‘office space’)
- Existing shareholders approving an increase in share capital from Kshs. 180 million to 240.7 million [~$3.82 million]
- Creation of 60.7 million new shares which will be offered to Cavendish Square Holdings (WPP subsidiary) at Kshs. 22 per share (Scangroup currently at 28.50). This will dilute existing shareholders stakes by about 8% each
- WPP get the right to nominate two directors and are locked in until 2012
- WPP will become the largest shareholder at 27.5% followed by MD Bharat Thakrar 20.6% and Chairman Andrew White 11.93%
- Retail bail?; Scangroup now has about 39,000 shareholders, down from 44,000 earlier this year.