Dubai -based Al-Futtaim was on Thursday still seeking the support of CMC shareholders owning six per cent stake to complete its takeover of the car firm. The company,, which plans to diversify its Kenyan operations to include retail and real estate, said Friday that CMC shareholders controlling 69 per cent of the firm had agreed to sell their shares to the company. Al-Futtaim needs to get sale commitment from CMC shareholders owning at least 75 per cent of the company's shares for the acquisition to succeed and to have the firm delisted from the Nairobi Securities Exchange. This must happen by February 14 as the promoters of the deal seek a 90 per cent threshold to allow for the compulsory acquisition of the remaining shares for a full buyout of the car dealer. "The subscription today stands at about 69 per cent," Marwan Shehadeh , Al-Futtaim's corporate development director told Business Daily on Friday. He added that the company wants to replicate its diversified operations in the local market, with retail and property development being its top priority. Al-Futtaim executives said the multinational will retain CMC's corporate and brand name but will make changes to the board and management team. The company is aggressively wooing CMC's retail investors whom it needs to close the deal after a late opening of the buyout in mid-December affected sale commitments. READ: Dubai's Al Futtaim extends offer period for CMC takeover Al-Futtaim was to close its Sh13 per share or Sh7.5 billion bid on January 24 but extended it to February 14 to avoid the risk of failing to hit the 75 per cent threshold. The firm said the extension was aimed at making up for the December holidays that reduced business days during which sale commitments could be received and processed. Major shareholders including Peter Muthoka , Charles Njonjo and Pau Ndungu who control 50.6 per cent stake have already pledged their shares to Al-Futtaim as they seek to exit the firm that was hit by boardroom wrangles. The entry of Al-Futtaim is expected to change the face of CMC, with the new owners saying they will venture into new businesses and geographical markets. "We are definitely interested in retail and property development," Mr Shehadeh said. The Dubai firm operates in 28 markets and has several divisions including automotive, financial services, retail, engineering, construction and real estate.Its brands in the segment include Marks &Spencer (fashion brand), IKEA (furniture), and Toys 'R' Us. CMC has significant parcels of land valued at about Sh2.5 billion including its head office premises along Nairobi's Bunyala Road . Al-Futtaim has undertaken massive real estate projects including the Dubai and Cairo "Festival'"cities sitting on 5.2 million and three million square metres respectively. The two developments feature shopping malls, clubs, schools, residential, and office blocks. The firm said it is also looking to expand CMC's brands in the motor vehicle business, leveraging on its existing relationships with global vehicle manufacturers. Its currently sells Toyota , Lexus , Dodge, Jeep, Hino , Volvo , Chevy, Honda cars and Al-Ghazi tractors in the Middle Eastern region. Most of these brands, however, already have distributors in the local market. It remains to be seen which brands Al-Futtaim will introduce following CMC loss of Range Rover, Jaguar and Land Rover brands to rival firm, RMA Kenya. The Dubai firm said the business diversification will be taken to new markets in the Eastern Africa region where it will be expanding from Kenya . READ: Dubai Al-Futtaim Group bids Sh7.5bn for CMC Holdings Al-Futtaim said the entry into more markets and new business lines should boost CMC's profits that have dropped in recent years. "We'll be able to turn it (CMC) around," said Yasser Alvi , Al-Futtaim's head of investments and acquisitions. "We are long-term investors. We don't buy companies to flip them." CMC has lost market share in the new vehicle market, a move that has seen its net profit drop from a peak of Sh927.1 million in 2008 to Sh110 million last year. The firm made its first net loss of Sh181.1 million in 2011 but bounced back to profitability a year later, but its owners have gone for three years in row without dividends.
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