Delaware-based conglomerate Seaboard Corporation has renewed its bid to delist grain miller Unga Group #ticker:UNGA from the Nairobi Securities Exchange (NSE) #ticker:NSE despite its recent failure to take over the Kenyan firm, putting it on a collision path with minority investors who rejected the offer.

Seaboard, in concert with the Philip Ndegwa family which holds a 50.93 per cent stake in Unga, got the backing of shareholders controlling a total 69.9 per cent equity.

The US firm had offered to buy Unga at a price of Sh40 a share.

The 69.9 per cent backing was, however, short of the minimum 75 per cent required to take the miller private, setting the stage for the latest bid.

Seaboard now says it has waived this threshold, and will proceed to buy the 12.2 million shares that were tendered.

The US firm further says it will call an extraordinary general meeting and ask shareholders to vote for the delisting of the miller--taking it private.

Such a resolution can, however, be blocked by investors with a combined ownership of at least 10 per cent.

"It remains the intention of Seaboard to proceed with its proposal to seek a delisting of the company from the Nairobi Securities Exchange at an extraordinary general meeting to be convened in due course," Seaboard said.

Kenya's securities law says that a delisting resolution can be passed by a simple majority at a meeting where shareholders with a combined stake of at least 75 per cent are represented in person or through proxies.

Such a resolution can nonetheless be nullified if investors with a 10 per cent equity or more vote against it.

"A security considered by the exchange to be eligible for continued listing shall not be removed from the list upon request or application of the issuer, unless the proposed withdrawal from listing is approved by the security holders at a meeting at which at least 75 per cent of such security holders are represented, without objection to the proposed withdrawal from at least ten per cent of the security holders," the NSE delisting rules say. If the delisting is successful, Unga will convert into a private company and the remaining minority shareholders will lose the liquidity and price discovery mechanism afforded by a public listing.

Seaboard, which wants to raise its stake in Unga, could still buy them out after taking the company private.

Unga’s minority shareholders who accepted Seaboard's offer will be paid an aggregate of Sh486 million from Thursday. The miller has started the process of transferring the 12.2 million shares to Seaboard, a move that will raise the multinational’s direct stake in Unga Group to 18.97 per cent.

Seaboard already had a 2.92 per cent interest in Unga before making its bid. The multinational has a separate 35 per cent stake in Unga Holdings--the investment vehicle through which the miller owns its operating units, including Unga Farm Care East Africa.

Investors who rejected its offer of Sh40 per share argued that the price represented huge undervaluation of the company, whose worth was estimated at up to Sh67.19 per share by an independent adviser.

Unga's board endorsed the offer, taking the lower valuation out of several presented to it by Faida Investment Bank, which it hired as an independent financial adviser (IFA).