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Small investors get better price in Sh110bn NCBA buyout
NCBA Group Managing Director and CEO John Gachora during a media briefing to announce their half year financial result release at Radison Blu Hotel in Nairobi on August 24, 2023.
Small investors will get a higher buyout price of Sh105 per share in Nedbank’s bid for a 66 percent stake in NCBA Group, with high-net-worth investors set to get a combined price of Sh98.72 per share in a composite cash-and-stock deal.
The South African bank has made an offer worth 13.9 billion rand (Sh109.9 billion) to all shareholders of NCBA to buy them out on a pro rata basis mostly using its shares to fund the transaction besides a cash component.
This means that NCBA investors can tender 66 percent of their shares. Out of this pool of shares, 80 percent of the units will be converted into Nedbank shares at a rate of 4.02994 shares for each 100 shares.
The Nedbank shares are priced at 250 rands (Sh1,928.5) in the transaction.
The remaining 20 percent of the shares will be bought in cash at a rate of Sh2,100 for each 100 shares. This brings their average compensation per share across the cash-and-stock deal to Sh98.72 though they benefit further from buying into Nedbank at a discount.
Nedbank’s share price closed at 274.1 rands on Wednesday, indicating that the conversion price is a discount of 9.6 percent.
Nedbank notes that those whose holdings are not large enough to secure them at least 200 Nedbank shares will only receive a higher cash price of Sh105 per share for the stocks they will have tendered.
NCBA shares trade at Sh90.5 on the Nairobi Securities Exchange (NSE) on Wednesday, with the cash buyout offer representing a slight premium.
“NCBA shareholders who have accepted the offer and would receive less than 200 Nedbank Group shares, shall be paid their full consideration in cash,” the lender said in a public notice.
“And for this purpose the amount payable per 100 NCBA Shares (which will be adjusted on a pro rata basis as required) shall be deemed to be Sh10,500.”
The move to offer a higher all-cash offer to small investors is seen as making it easier for them to realise the value of their shares.
Converting a small portfolio of NCBA shares into Nedbank stock is likely to be uneconomical. Unlike the top NCBA investors who have committed to sell their shares to Nedbank, many retail shareholders may also not be willing to invest in the South African bank.
NCBA investors with less than 9,400 shares (worth Sh850,700 as of Wednesday’s close) will not qualify for the cash-and-stock deal, limiting them to take their compensation in cash.
The NSE-listed firm had 11,912 shareholders with holdings of between one and 500 shares as of December 2025, according to regulatory filings.
Another 13,389 investors had portfolios ranging from 501 and 5,000 shares.
The filings show that 1,853 of the bank’s shareholders held between 5,001 and 10,000 shares.
For each 100 shares of NCBA, an investor being paid only in cash will receive Sh10,500 while one compensated in cash and Nedbank stock will receive a total value of Sh9,872.
The transaction has received the support of NCBA’s top shareholders who are among the country’s wealthiest individuals.
The major owners of the lender include the Jomo Kenyatta family, the Philip Ndegwa family and the Simeon Nyachae family.
The disclosure of the Nedbank offer comes after reports that its rival Standard Bank Group had pursued NCBA late last year, indicating that there could have been a bidding war for the Kenyan banking multinational.
The NCBA acquisition deal is part of Nedbank’s revised Africa growth plan after it sold its 21.1 percent stake in Nigerian lender Ecobank in 2025 for R1.8 billion amid regulatory uncertainty and a tough operations environment in that market.
If concluded in the proposed form, the transaction will see NCBA becoming a subsidiary of Nedbank, while the remaining 34percent of NCBA shares will continue to trade publicly on the Nairobi bourse.
Nedbank says if it is not granted an exemption from the requirement to make a mandatory offer for all of NCBA’s shares by May 31, 2026, its bid will change to an offer for the whole bank.
The South African firm says the buyout of NCBA will give it a major presence in the East Africa market where the Kenyan banking multinational is a major player.
“Nedbank Group has identified East Africa as a region of significant strategic importance, underpinned by strong macroeconomic fundamentals,” the offeror said.
“By partnering with NCBA, a top tier-1 Kenyan bank with a growing presence in Rwanda, Tanzania and Uganda and a unique digital approach to Ghana and Ivory Coast, Nedbank Group is executing on its communicated strategy to diversify and grow its presence on the broader African continent, with a clear focus on the SADC and East Africa regions.”
