BOC Kenya’s Carbacid and Aksaya Bid in Troubled Waters

Carbacid Investments and Aksaya Investments plan to take over BOC Kenya forKSh 1.24 billion is in troubled waters, pending the hearing of an appeal at the Capital Markets Tribunal.

BOC Kenya, a leading supplier of industrial, medical, and special gases in a cautionary announcement to shareholders and the public, an appeal was filed on 2 March 2021 in respect to the take-over offer by the two.

“Pending further guidance from the CMA and or CMT, we wish to inform you that no further action should be taken in relation to the activities set out in the transaction timetable provided in th takeover offer document forwarded to on 19 February 2021,” BOC said adding that it includes the filing and return of acceptance forms.

Section 35A (17) of the Capital Markets Act (CAP 485A Laws of Kenya) provides that upon any appeal to the Capital Markets Tribunal, the status quo of any other matter or activity related to the appeal shall remain until the appeal is determined.

BOC received the Takeover Offer document on 6th January 2021. Its majority shareholder has accepted the take-over offer on the condition that the deal is concluded by 31 July 2021 or the agreement ceases to exist.

The Board of BOC as required by the Capital Markets Takeover Regulations appointed an investment bank, Dyer and Blair Investment Bank to undertake an independent evaluation of the offer and advise shareholders as to whether the offer was fair.

 The verdict of Dyer and Blair is that the fair value of a share of BOC is at least Ksh 91.76. This is 44.5% higher than the Ksh 63.50 on offer. 

This is KSh552 million more than Carbacid’s total bid price of KSh1.2 billion.

Consequently, BOC Kenya opted not to recommend the company’s takeover by Carbacid Investments to its shareholders. 

“Your board has therefore for the foregoing reasons resolved NOT to recommend the offer for acceptance by shareholders. Shareholders are therefore encouraged to obtain independent professional advice from their professional advisers regarding the merits of accepting or not accepting the offer,” BOC said in a circular to shareholders.