What we know
- Two new cornerstones: RWC Asset Management, part of the Redwheel Group, has committed about KSh1.3 billion ($10 million), and 337 Frontier Capital about KSh1.94 billion ($15 million), according to Quickmart’s supplementary information memorandum.
- Four anchors in total: The pair join the International Finance Corporation and the UK government’s MOBILIST programme, taking cornerstone commitments to about $55 million.
- Cornerstone pool nearly quadruples: Anchor investors now hold 48% of the shares on offer, up from the 13% set aside for the IFC in the original memorandum.
- Smaller pools for everyone else: Retail investors are allocated 12% of the offer, institutions 32% and foreign investors 8%, down from 20% for the foreign pool previously.
- No scaling back for anchors: Cornerstones will receive their shares in full even if the offer is oversubscribed; other categories may be cut on a pro rata basis.
- Price and valuation unchanged: Shares remain at KSh7.50 ($0.06), valuing Quickmart at KSh30 billion ($232 million).
The Capital Markets Authority on Oct. 23 approved the supplementary memorandum admitting both investors. RWC is regulated by the UK Financial Conduct Authority and the US Securities and Exchange Commission. 337 Frontier is an investment adviser registered with the SEC.
According to the memorandum, Quickmart and the selling shareholder accepted an application from 337 Frontier for about KSh1.94 billion ($15 million) of shares, roughly 13% of the offer and 6.5% of the company after listing. RWC applied for about KSh1.3 billion ($10 million), equal to 8.7% of the offer and 4.3% of the company.
The memorandum also formally admits the UK Foreign, Commonwealth and Development Office, investing through MOBILIST, as a cornerstone. Its application of about KSh1.94 billion ($15 million) for 6.5% of the company was announced on Oct. 20. The IFC holds a commitment of the same size and stake, which still requires approval from its board, the company said.
The additions led Quickmart to rewrite how the 2 billion shares on offer are divided. The cornerstone pool now holds 960 million shares worth KSh7.2 billion ($55.7 million). Kenyan and East African retail investors are allocated 240 million shares worth KSh1.8 billion ($13.9 million). Kenyan and East African institutions get 640 million shares worth KSh4.8 billion ($37.1 million), and the foreign investor pool holds 160 million shares worth KSh1.2 billion ($9.3 million).
If any category is undersubscribed, unallocated shares will go first to retail investors, with Quickmart staff given priority within that pool, then to institutions, then to foreign investors, and finally to cornerstones up to the amount each applied for, according to the memorandum.
The offer requires valid applications for at least 75% of the shares, or 1.5 billion shares, by the closing date. Cornerstone commitments account for 960 million of those, leaving 540 million shares, worth about KSh4.05 billion ($31.3 million), to come from other investors.
The memorandum states that cornerstone participation does not amount to a recommendation or endorsement of the offer by any of the four investors. Applications already submitted remain valid, and applicants need take no further action, according to the announcement signed by Quickmart Chairperson Jérôme Loubère.
Sokoni Retail Kenya Limited, the vehicle through which Quickmart’s current owners hold their stakes, is selling 2 billion existing shares, half of the company’s issued share capital. Quickmart will receive none of the proceeds. All other terms of the offer are unchanged, the company said.
What to expect
- Oct. 30: The offer closes, and it is the final payment date for retail investors.
- Nov. 6: Quickmart expects to announce offer results and notify investors of their allocations.
- Nov. 10: Qualified institutional investors pay for their shares.
- Nov. 11: Shares are credited to investors’ CDS accounts and any refunds begin processing.
- Nov. 12: Quickmart is scheduled to begin trading on the Main Investment Market Segment of the Nairobi Securities Exchange.
- IFC board decision: The IFC’s commitment remains subject to approval from its board of directors, according to the company.