Central Bank of Kenya (CBK) has approved the acquisition of 100 percent of National Bank of Kenya’s shareholding (NBK) by Kenya Commercial Bank Group (KCB)
The approval comes two days after KCB’S offer to buyout National Bank of Kenya (NBK) shareholders closed. KCB is Kenya’s biggest commercial bank by assets.
National bank of Kenya is a mid-tier bank that is majority-owned by the government of Kenya.
“The acquisition will strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises,” read CBK’s approval statement.
The union between the two lenders was only awaiting approval from the Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), Central Bank of Kenya (CBK), the Competition Authority and shareholders before being finalized.
The NBK’s shareholders have since taken up KCB’s share-swap offer which entailed a bargain of 10 NBK shares for every single one of KCB’s. The share-swap window closed at the end of business on Friday having already gathered the support of a majority 77.6 percent share stake or an equivalent 263 million shares of NBK.
KCB is expected to disclose the offer results on September 13 ahead of the accreditation and listing of the transferred shares at the end of September.
National Bank’s fair value price was KSh6.10 per share. In contrast, KCB group’s offer price of about KSh3.80 per share, substantially below the stock’s fair value.
Kenya Commercial Bank (KCB) had sought to waive options to have NBK delisted from the Nairobi bourse even as a takeover move by the lender had entered the final stretch.
In a public announcement by KCB, 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.
Up until the acquisition, KCB had 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.
KCB which owes five other subsidiaries in the region, including a representative office in Ethiopia seeks to create East Africa’s first Ksh.1 trillion valued bank in a quest for consolidation and regional expansion.