Companies

Burbidge owners earn Sh63.7 million from sale of stake to I&M

Founders of corporate advisory firm Burbidge Capital are set to pocket Sh63.7 million from the sale of a 65 per cent stake in the company to listed banking group I&M Holdings.

I&M says in a circular that the payout to David Burbidge (chairman) and Edward Burbidge (CEO) is Sh55.7 million in cash and the rest in the form of 65,722 shares of the Nairobi Securities Exchange-listed firm.

The shares are to be bought on the open market, meaning that there will be no dilution for existing shareholders of the company.

Mr David Burbidge will sell all his 23,921 shares in the company to I&M, earning a total of Sh44.1 million. Mr Edward Burbidge is to earn Sh19.3 million from selling 10,556 shares in the company, a move that will leave him with 16,444 shares equivalent to a 31 per cent stake.

Mr Edward has also undertaken to transfer 2,121 shares out of his original 29,051 shares to create an employee share ownership plan (ESOP) for staff of the advisory firm.

Finalise the pending issues

Employees of Burbidge include Mr Vimal Parmar who is the director of research. The ESOP’s stake will stand at four per cent.

Mr George Delacherois-Day, who currently owns 70 shares in Burbidge, will also sell to I&M earning about Sh129,000. I&M is expected to complete the transaction in the coming weeks.

READ: I&M Holdings owners give the nod for Burbidge takeover

“We expect to finalise the pending issues by this week,” Gauri Gupta, the general manager (corporate advisory) at I&M Bank told Business Daily.

She added that the company has received regulatory approvals from the Central Bank of Kenya and Competition Authority of Kenya, with one from the Capital Markets Authority still pending.

I&M is betting on the acquisition to broaden its range of financial services and acquire more clients through Burbidge which is licensed as an investment advisor by the Capital Markets Authority and a nominated advisor to firms listed on the Growth Enterprise Market Segment of the NSE.

“It provides the I&M Group an opportunity to increase its reach and services to meet the requirements of its customers who require specialist advisory services,” I&M said in the circular.
“We expect a significant surge in activity due to an increase in marketing and advisory mandates from I&M Group’s existing client base, as well as the extension of debt-related services to Burbidge’s existing client base.”