Britam has disclosed its bid to expand its Equity Bank shareholding. Photo/FILE
What you need to know:
Britam, which already holds a 10.1 per cent interest in Equity, did not give details of the planned additional share purchases.
Equity’s shareholding is highly fragmented, signalling that a major share purchase could involve Helios EB Investors which has the largest stake at 24.45 per cent.
The move to buy more shares in Equity is a continuation of Britam’s aggressive investments that has seen it spend Sh1.5 billion in two acquisitions in less than a year.
Financial services firm Britam is eyeing a larger stake in Equity Bank, days after announcing its intention to acquire the lender’s 24.76 per cent equity in mortgage company Housing Finance.
Britam disclosed its bid to expand its Equity shareholding in documents prepared to guide investors in its Sh6 billion corporate bond whose offer period ended last Friday.
The company, which already holds a 10.1 per cent interest in Equity, did not give details of the planned additional share purchases.
Britam and Equity did not respond to our queries by the time of going to Press.
Equity’s shareholding is highly fragmented, signalling that a major share purchase could involve Helios EB Investors which has the largest stake at 24.45 per cent.
Apart from Britam, other large investors in the bank hold stakes of between one per cent and four per cent either directly or through nominee accounts.
Helios in 2007 said it would exit Equity Bank in a period of between three and seven years through the Nairobi bourse after paying Sh11 billion to acquire a 24.9 per cent stake in the lender.
The stake has appreciated to Sh40.5 billion based on the lender’s share price of Sh44.75, meaning its investment has grown three-fold over the years including dividends.
Helios last year said it had pushed forward its exit timelines and it remains to be seen which current investor in Equity will be selling its shares to Britam.
Since the lender’s debut on the NSE on August 7, 2006, the share has appreciated by more than 900 per cent, taking into account splits and bonus stocks in what has made its owners, including employees, directors and founders, millionaires.
The move to buy more shares in Equity is a continuation of Britam’s aggressive investments that has seen it spend Sh1.5 billion in two acquisitions in less than a year.
The firm said in its bond disclosures that it will further invest in property development firm Acorn Group, Housing Finance (HF) and Equity which form its key private equity portfolio.
The HF stake it is set to buy from Equity is currently worth 2.5 billion based on the mortgage firm’s share price of Sh44.5. The transaction will see Britam’s ownership in HF rise to 46 per cent from the current 21.46 per cent, giving it control of the company.
The deal will see Equity, which first bought into HF in 2007, exit with a return of more than 500 per cent including the dividends it has been receiving from the mortgage financier.
Besides expanding its Equity ownership, Britam is also eyeing a larger stake in Acorn Group in which it bought a 25 per cent stake last year for an estimated Sh300 million.
Britam also recently finalised its 99 per cent takeover of Real Insurance in a cash-and-stock deal worth Sh1.3 billion, with the impending deals underlining its expansion appetite.
