Pan Africa Insurance buys minority stake in Family Bank
Peter Munyiri, Family Bank managing director. Photo/FILE
What you need to know:
Family Bank’s chief executive Peter Munyiri said the insurer acquired the stake after participating in the lender’s December rights issue that raised Sh1.2 billion.
Pan Africa’s investment in the bank is likely to lift its earnings which analysts at NIC Securities project to be boosted by its sales of properties in Runda Estate.
Pan Africa Insurance has bought a 3.59 per cent stake in Family Bank in a move that has further diversified the ownership base of the bank away from its founders.
Family Bank’s chief executive Peter Munyiri said the insurer acquired the stake after participating in the lender’s December rights issue that raised Sh1.2 billion.
The rights issue was priced at Sh31 per share, with Pan Africa investing Sh310 million to buy 10 million shares in the lender, acquiring the minority stake.
“Pan Africa joined our list of institutional investors after taking part in our recent rights issue,” Mr Munyiri said.
The insurer bought the Family Bank shares through its investment arm Pan Africa Securities that also owns properties in Runda Estate under the Mae Properties brand.
Pan Africa’s investment in the bank is likely to lift its earnings which analysts at NIC Securities project to be boosted by its sales of properties in Runda Estate.
Pan Africa’s entry in Family Bank has expanded the number of local institutional investors in the lender whose founders are cutting back their ownership.
The insurer joins Kenya Tea Development Agency (KTDA) and pension fund LAP Trust which took up significant shareholding in the bank in early December before the rights issue after buying out foreign investors.
The two institutional investors paid about Sh1.5 billion to acquire the 22.4 per cent stake previously held by AfricInvest, Norways’ Norfund, and Netherlands FMO.
KTDA now holds a 15.37 per cent stake in Family Bank while Lap Trust has 4.2 per cent, bringing their combined ownership to 19.5 per cent and their marginal dilution has been linked to the rights issue.
Family Bank’s founder Titus Muya was also diluted in the cash call in which he did not participate, with his direct stake dropping to 5.78 per cent from the previous 6.8 per cent.
Mr Muya’s dilution is seen as a steady step to further reducing the Muya family’s interest in the bank.
The family controls a total of 57 per cent stake in the bank through the shareholding of Mr Muya, his investment vehicle Daykio Plantations, and other related parties which also did not take up their rights in the rights issue.
Before the cash call, the family had a combined stake of 60 per cent in the mid-tier bank.
