Britam’s stock dipped 7.94 per cent Wednesday to close at Sh11.60 after rising 26 per cent Tuesday to close at Sh12.60. Shares traded rose steeply to 1.16 million compared to Tuesday’s 93,700.
The share witnessed a sharp rise earlier on the back of news that the International Finance Corporation (IFC) was set to take up a 10.37 per cent stake in the insurer in a Sh3.5 billion deal.
On Tuesday investors’ attention could have been attracted by the fact that IFC, which is the World Bank’s private investment arm, was willing to pay a premium to get its hands on 224.1 million shares in Britam at Sh15.85 apiece.
The Nairobi Securities Exchange listed firm had announced that IFC was set to invest Sh3.5 billion in acquiring a stake.
Britam said the proposed transaction, which will see the allocation of 224.1 million new ordinary shares to IFC, is subject to approvals by regulators and shareholders.
“The proposed subscription is subject to conditions that are customary to transactions of this nature, including receipt of shareholders’ approval and regulatory approvals,” Britam said in a statement.
The insurer did not indicate how it would invest the cash realised in the share sale.
The company last raised Sh6 billion in 2014 through a corporate bond, which will be redeemed in July 2019.
Britam’s recent major investment has been the construction of Britam Tower in Nairobi’s Upper Hill, which has a space of 30,000 square metres.