The Central Bank of Kenya has approved the acquisition of 100% shareholding in National Bank of Kenya (NBK) by KCB Group.
In a statement, CBK says the move will strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises.
The approval, which was granted in accordance with Section 13 (1) (c) of the Banking Act, comes despite opposition from the National Assembly Finance and Planning Committee, which holds that KCB Group undervalued NBK’s worth. Its report is yet to be tabled for debate.
High Court Judge Weldon Korir also last week threw out a suit filed by Evans Aseto and John Kiptoo seeking to stop the buyout on grounds that due process had not been followed, saying there was no evidence to that effect.
The deal had, however, received the nod of the Capital Markets Authority and the Competition Authority of Kenya. KCB met the threshold to acquire NBK after receiving acceptances of over 262 million shares out of the more than 338 million NBK shares. This amounted to 77.6% of NBK shares being accepted as part of the share swap deal in the takeover by KCB.
Kenya’s largest lender by assets needed 75% threshold of new shareholders coming on board for it to declare the transaction a success. NBK shareholders had until Friday, August 30, to accept the KCB offer but majority of the 55,000 small shareholders were reluctant as a result of the controversy surrounding the lender’s valuation.
While KCB plans to pay Ksh 6 billion for the 100% stake or 10 NBK shares for one KCB share, independent advisors, in their report, valued the bank at Ksh 9.0 billion with the “value indicatively up to Ksh 6.62 per share or 1 share of KCB for every 7.05 shares of NBK.”
Ahead of the conclusion of the deal, KCB Group agreed to waive conditions relating to delisting and acceptances allowing those who will decide to sell to do so on the Nairobi Securities Exchange (NSE).
“At the appropriate time, KCB will seek the requisite corporate and regulatory approvals for the delisting of NBK,” it said.
KCB intends to take over NBK and maintain it as a subsidiary which will continue operating NBK’s banking business alongside KCB Bank Kenya Limited, its wholly-owned subsidiary which is in the same line of business. This, according to a KCB offer document, will subsist for a period of two years, after which both banks will be integrated.
