National Bank of Kenya Board Reviewing KCB Group’s Takeover Bid. Advises Shareholders to Exercise Caution

NBK Issues Profit Warning

National Bank of Kenya AGM in 2017

The National Bank of Kenya will exit the Nairobi Securities Exchange once the takeover deal by KCB Group PLc is approved. KCB Group Plc has declared its intention to acquire 100% stake of National Bank of Kenya through a share swap deal, comprising of 10 ordinary shares of NBK for every 1 ordinary share of KCB.

“The acquisition of the Offer Shares by the Offeror is also stated to be subject to several conditions, including: (i) the Company delisting from the Nairobi Securities Exchange upon acceptance of the Offer by not less than 75% of the Offer Shares including scope for minority squeeze out; (ii) the conversion of the 1,135,000,000 preference shares in the capital of the Company to 1,135,000,000 new ordinary shares,” said Habil A. Waswani, NBK Company Secretary on behalf of the Board.

The deal is subject to regulatory approvals from, the Capital Markets Authority, the Central Bank of Kenya, and the Competition Authority of Kenya.

“The Board of the Company will consider the Offeror’s Statement in detail and make consultations and then seek the necessary approvals from the Shareholders and the regulators once the approved Take Over Document has been received from KCB and evaluated,” added the NBK Board.

Cytonn Investments says increased consolidation in the Kenyan financial sector is in line with their expectations, “As players with depleted capital positions become acquired by their larger counterparts or merge together to form well-capitalized entities capable of navigating the relatively tough operating environment induced by price controls on lending rates, and exacerbated by the stiff competition.”

Reuters has also reported that KCB Group is in the process of buying a bank in Rwanda and one in the Democratic Republic of the Congo (DRC).

On the other hand, KCB Group’s bid to acquire Imperial Bank Limited under Receivership (IBLR), reached a significant milestone, with the acceptance of KCB Group’s final offer by both the Central Bank of Kenya and the Kenya Deposit Insurance Corporation (KDIC).

Other financial institutions in the process of acquiring others include:

The merging of NIC Group and CBA Group. Their shareholders have approved the merger of the two banks in their respective Annual General Meetings. However, it still needs approval from local and regional regulators including Bank of Tanzania, the Central Bank of Kenya, Capital Markets Authority and Competition Authority of Kenya.

Equity Group has said it is in talks with London-listed financial services firm Atlas Mara Limited about acquiring stakes in banks in Rwanda, Zambia, Mozambique and Tanzania.