KCB Group shareholders have given a thumbs up to the firm’s board who can now continue with the proposal to acquire 100% of ordinary shares of National Bank of Kenya Limited (NBK).
The proposed buyout was made on April 18 by KCB. The deal seeks to see Kenya’s biggest lender by asset base acquire 100% of NBK shares by way of a share swap of 10 ordinary shares of NBK for every 1 ordinary share of KCB.
Regulatory approval as well as green-light from NBK shareholders is all that stands in the way of the deal.
Already, the Capital Markets Authority (CMA) has given the go ahead, leaving requisite approval to now be sought from the Competition Authority of Kenya (CAK).
NBK shareholders are set to meet on June 14 where as regards the proposed takeover, investors will deliberate on whether to increase the lender’s share capital to Ksh13 billion.
“For us, the acquisition is an opportunity to strengthen the deposit base and lending capacity, increase cost efficiencies due to economies of scale and boost transactional revenue through leveraging of technology,” said KCB Group Chair Andrew Wambari Kairu
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The approval by KCB shareholders has defied some market analysts who had projected that the lender’s investors would not be as enthusiastic of the proposed merger in light of NBK’s decreasing profitability.
NBK’s profitability recently declined by 42% to Ksh456 million for the year ended December 31, 2018.
Kairu said of the proposed merger, “This is an attractive commercially viable proposition that provides the scale needed to compete and win in the rapidly evolving world of financial service.”
KCB shareholders also approved the recommended final dividend of Ksh2.50 per share. This brings to Ksh3.50 the total dividend per share and Ksh10.7 billion as total dividend for the year.
The dividend will be paid on or before July 30 to shareholders on the register as of close of business on April 29.
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