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Diageo urges Kenyan chief justice to speed up hearings of bids to stop $2.3 billion Asahi deal (updated)

UPDATE 1-Diageo urges Kenyan chief justice to speed up hearings of bids to stop $2.3 billion Asahi deal

Adds Diageo and EABL comments in bullets 7 and 8

- Diageo's East African Breweries EABL.NR, DGE.L unit has written to Kenya's chief justice urging her to speed up the hearings of cases seeking to block a $2.3 billion stake sale to Japan's Asahi Holdings 2502.T, a letter seen by Reuters showed.

In the fourth in a series of challenges to London-listed Diageo's plan announced in December to sell its 65% stake in EABL to the Japanese brewer, a minority shareholder last week secured a court order halting the deal.

Here are some details:

  • The suit questions whether minority stakeholders will be treated fairly, among other grievances.

  • EABL lawyers wrote on Tuesday to Chief Justice Martha Koome, calling her attention to a "proliferation of parallel proceedings" and the risk of conflicting orders in relation to the deal.

  • The letter raised concerns about "apparent forum shopping".

  • It said the case at the High Court in Machakos, an hour's drive from Nairobi, represented a strategy to secure relief from another High Court that had been declined by the High Court in Nairobi.

  • The deal was governed by a time-sensitive contractual and regulatory timetable spread across more than one country, it said.

  • There was no immediate response from Koome's office.

  • Diageo said it "remains confident in the merits of the transaction and will take all necessary steps to protect its position, while continuing to respect the court process".

  • EABL said it was unfortunate that a deal that will benefit the Kenyan economy has "been repeatedly targeted through coordinated litigation tactics designed to disrupt the transaction for private commercial purposes".

  • The parties in the deal have said they expect it to be completed in the second half of this year.

  • Of the three previous suits against the deal, two were dismissed and the outcome of the third is unclear.


(Reporting by Duncan Miriri in Nairobi and Emma Rumney in London; Editing by Jan Harvey and Barbara Lewis)

((duncan.miriri@thomsonreuters.com))

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