Former BOC chair Kiuna ups stake as buyout frozen


Former Boc Kenya chairman Ngugi Kiuna. FILE PHOTO | NMG

Former BOC Kenya chairman Ngugi Kiuna has bought more shares in the company after opposing its buyout by Carbacid Investments, taking his ownership closer to the 10 percent threshold that allows one to veto a resolution to delist a publicly traded firm.

Mr Ngugi acquired an additional 93,000 shares currently worth Sh6.9 million in the year ended December, according to the company’s latest annual report.

This raised his stake to 8.08 percent from the 7.6 percent he held in 2020, cementing his position as the second-largest investor in BOC. According to Kenyan securities laws, a shareholder with a 10 percent equity can veto a resolution to delist a publicly traded firm.

BOC’s share price has risen to trade at Sh75, significantly above the joint buyout offer of Carbacid and investment firm Aksaya of Sh63.5 per share or a total of Sh1.2 billion.

Regulators have allowed the company's shares to trade unlike in previous deals where the stocks of target firms were suspended.

The proposed transaction has not progressed due to legal roadblocks erected by BOC’s minority shareholders.

The deal was first announced in November 2020 and was initially expected to be completed by July 2021.

Mr Kiuna filed an appeal at the Capital Markets Tribunal in March last year, objecting to the buyout which he says undervalues the company.

The target’s majority shareholder, BOC Holdings (UK), has already committed to selling its 65.38 percent stake to the offerors on those terms.

An independent financial advisor hired by BOC to review Carbacid’s offer said the company is worth at least Sh91.76 per share or an aggregate of Sh1.7 billion.

The tribunal has not heard the matter due to a lack of quorum, with the vacancies persisting to date. A court case also stopping the proposed transactions is yet to be determined.

Minority investors have the option of accepting or rejecting the offer but run the risk of holding illiquid shares should BOC be delisted from the NSE.

BOC Kenya says it has spent Sh34 million on professional services relating to the stalled deal.

“Included in administrative expenses are costs of Sh25.4 million (2020: Sh8.6 million) that are in respect of the proposed divestment of shares by the company’s majority shareholder, BOC Holdings (UK),” BOC says in the report.

“The costs primarily comprise legal fees, investment adviser fees and the cost of various public notices.”

[email protected]