KCB Group Ltd.’s bid to takeover National Bank of Kenya has suffered a major setback after Parliament said the offer was undervalued.
According to the National Assembly’s Finance and National Planning Committee, National Bank should instead raise capital through a rights issue.
“Considering submissions by stakeholders, the committee recommends that the principal shareholders (National Treasury and National Social Security Fund (NSSF), should not accept the offer by KCB on the acquisition of 100 percent shares of NBK,” states the committee chair, Joseph Limo.
“The National Bank should pursue the Rights Issue in order to raise enough capital,” states the report from the committee tabled on Thursday.
In July, the Board of National Bank of Kenya said KCB Group’s valuation of its shares fell below its independent valuation of KSh6.10 per share according to its ‘Shareholders’ Circular on the Proposed Take-over offer by KCB Group.
KCB Group offered to acquire a 100% 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.
