Priority for early bidders as Diageo buys EABL shares

British multinational Diageo has recently announced that they will give EABL shareholders who were on the brewer’s books by January 16 and early bidders the first priority in its plan to purchase an additional 14.97 percent stake in the local subsidiary.

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However, the priority treatment will kick in if there is an oversubscription in the offer, which opened on Monday to run until March 17, with a pool of 47.5 million shares designated towards a guaranteed allocation of up to 10,000 shares for all bidders in the first phase of the sale according to business daily.

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“In the event that the tender offer is oversubscribed, and the guaranteed allocation pool is insufficient to satisfy each accepting shareholder’s first 10,000 ordinary shares, then preference to the guaranteed allocation pool will be given to shareholders appearing on the register on the record date, whether or not such shareholder is an early acceptance shareholder or a final acceptance shareholder,” said Diageo in the tender document.

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However,an additional 55 million shares will be used to satisfy bidders who missed out on their full allocation in the first phase which runs between February 27 and March 17, with the balance being to cover the remaining bids.

Nonetheless, Diageo is buying an additional 118.4 million shares in EABL at a price of Sh192 per unit, with the offer open to all holders of unencumbered shares of the brewer.

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