BOC Kenya Facing Trouble in Carbacid Investments Takeover

Carbacid Investments plc will seek shareholder approval to acquire all 19,525,446 shares in listed manufacturer BOC Kenya.

BOC Kenya has delayed its takeover by Carbacid Investments by not serving its shareholders with the offer documents.

Through a public notice on Friday, BOC informed its shareholders that it would not circulate the documents as planned pending the resolution of undefined issues.

“This is to allow for consultations pertaining to certain issues that have risen related to the proposed transaction and which impacts the takeover documents,” BOC’s board stated.

BOC received approval from the Capital Markets Authority (CMA) to extend the time granted to serve its shareholders with the offer documents on 5th February 2021. The initial date was Feb. 25, 2021.

BOC Kenya is in the process of being acquired by Carbacid Investments and Aksaya Investments for a cash consideration of KSh 1.24 billion. 

Carbacid shareholders during their Annual General Meeting approved the planned acquisition of the manufacturer at the end of January.

The proposed transaction is subject to regulatory approval from the Capital Markets Authority and the Competition Authority of Kenya.

BOC Kenya is a leading supplier of industrial, medical, and special gases in Kenya, Tanzania, and Uganda. It is also listed at the Nairobi Securities Exchange. 

The current share price is Ksh 60.00. The BOC stock closed its last trading day (Friday, February 5, 2021) at 60.00 Kshper share recording a 3.45% gain over its previous closing price of Ksh 58.00.

“Speculative investors should cautious on entry positions on the transaction with recent announcement potentially indicating difficulties in closure of the transaction,” Genghis Capital said in its Cross Asset Weekly Strategy – 8th February 2021 view on out of consensus trades.

Updated with Genghis Capital Commentary.