Kenya Commercial Bank Group has proposed a 100 percent stake takeover of cash strapped National Bank of Kenya (NBK).
The offer which has been approved by KCB board has been submitted to NBK for review, before proceeding to the Competition Authority of Kenya.
The offer proposes a 1:10 ordinary share-swap, culminating to a 100 percent stake takeover.
“We KCB Group Plc hereby give notice that we intend to acquire 100 per cent of the ordinary shares with a par value of Ksh5 of NBK. The offer shall be by way of a share swap of 10 ordinary shares of NBK for every one ordinary share of KCB,” KCB board announced in a statement approved by Capital Markets Authority (CMA).
KCB Chief Executive Officer Joshua Oigara says the offer is in a bid to solidify its footing in the East African region.
“The planned acquisition would accelerate the group’s growth ambitions and enhance value to shareholders as it would bring in more assets and scale. It presents an opportunity for more consolidation in Kenya’s banking industry,” he said.
KCB plans to de-list NBK fro the Nairobi Stock Exchange (NSE) upon the receipt of 75 percent of the bank’s total shareholding.
The majority stake of the NBK is owned by the National Social Security Fund (NSSF), and is set to relinquish its shares in case the takeover succeeds.
KCB recorded a Ksh24 billion (22 percent rise) while NBK’s profits slumped by 98 percent over the same period.
Under the leadership of Wilfred Musau, leading to loss of millions that has seen the lender crumble silently.
NBK has been struggling with bad debt amounting to more than Ksh30.1 billion, part of it which it might be forced to write off for non-recovery.
Principal owners also were hesitant in injecting Ksh4.2 billion bailout money, leaving the management stranded.
It was reported last year by Kahawa Tungu that a bigger chunk of the debt was orchestrated by top managers who looted the bank to its knees.