Kenya Commercial Bank (KCB) will waive the option to have National Bank of Kenya (NBK) delisted from the Nairobi bourse even as a takeover move by the lender enters its final stretch.
In a public announcement by KCB, the lender said that its decision to waive the delisting condition was due to the fact that the NBK Board did not present a resolution to shareholders to have it delisted from the Nairobi Securities Exchange (NSE) during the June AGM.
At the same time, KCB said that it would also not wait to acquire 100% of NBK shares and will proceed with the takeover.
So far, KCB has received acceptances of over 262 million shares out of the more than 338 million NBK shares. This amounts to 77.6% of NBK shares being accepted as part of the share swap deal in the takeover by KCB.
“… noting that the conditions relating to delisting and acceptances are legally capable of waiver, KCB has determined to waive the two conditions,” the public announcement signed by the KCB Board said.
The transaction will need approval from the Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), Central Bank of Kenya (CBK), the Competition Authority and shareholders before it is finalized.
According to the investment advisor SIB, National Bank’s fair value price is KSh6.10 per share. In contrast, KCB group’s offer price of about KSh3.80 per share is substantially below the stock’s fair value.
The board of NBK recommends the offer to shareholders despite the undervaluation. In the circular to investors, the directors noted “….although NBK remains a strong bank, it requires more capital to meet the regulatory capital and grow its business, which capital can be provided by KCB.”
The transaction advisors for the project are Standard Investment Bank and Pacifis Advisory Limited while Oraro & Company Advocates and Miller & Company Advocates are the legal advisors.