KCB Group has offered National Bank of Kenya Ksh.6.6 billion shillings to acquire 100% of the struggling bank.
In a binding takeover document presented by NBK, the bank anticipates that the deal between the two lenders will be completed by September 20 this year.
The offer pins the value of NBK at Ksh.6.6 billion follows the lender’s successful delegation of its preferential shares into ordinary shares on 1:1 basis, having gotten shareholder approval on June 14, 2019.
KCB Group made known its intentions to acquire a 100 percent stake in NBK on April 18, 2019 in a share swap transaction involving the exchange of 10 NBK shares for every one of KCB’s.
With the details of the takeover now at hand, the board of National Bank is now at liberty to disclose the same to shareholders before subjecting the deal to a final seal of approval.
National Bank had, during its Annual General Meeting (AGM) last Friday, postponed the decisive shareholder vote pending the issuance of the comprehensive offer document by KCB.
“Further details of the proposed transaction will be issued through the requisite announcement the company will make pursuant to the provisions of the capital markets takeover and general regulations,” noted NBK Group company secretary Habil Waswani in a notice.
Central to the disclosure of the transaction will be the stakes for staff, a factor cleared up by Group Chief Executive Officer Wilfred Musau.
“The ongoing discussions are dictated by some rationale. In any process the most priority imperative is for us to preserve value for all shareholders including staff,” he said.
With the acquisition, KCB Group expects to grow its asset base to over Ksh.1 trillion upon the completion of the deal while NBK seeks to escape its closing cash-crunch walls.
KCB is Kenya’s largest bank by asset base and is expected to run NBK as a subsidiary for a period of 12-months before re-integrating NBK as part of its general business.
The transaction however remains the subject of shareholder approval and regulatory clearance from the Central Bank of Kenya (CBK), the Capital Markets Authority (CMA) and the Competition Authority of Kenya (CAK).
Further, the deal remains under the scrutiny of Parliament with the National Assembly Accounts and Investment Committee expected to resume deliberations of the takeover proposal with the board of NBK next week.
National Bank is expected to be de-listed from the Nairobi Securities Exchange (NSE) upon the capture of at least 75 percent of the lender’s shares by the acquiring entity.
It remains to be seen whether the board of NBK will subject the deal to a new vote by shareholders given the already stamp of clearance from the bank’s majority shareholder in the government represented by the Cabinet Secretary to the National Treasury and the National Social Security Fund (NSSF).
The NSSF Fund has 397 million shares making up 26.99% while the government through Treasury owns 976 million shares translating to 66.24%.
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