The wait by Carbacid and its majority shareholder Baloobhai Patel to take over fellow listed industrial gases maker BOC Gases has entered its third year, held up by the continued lack of quorum in the Capital Markets Tribunal where a challenge to the deal has been lodged.
Acting in concert, Carbacid and Mr Patel —through his investment vehicle Aksaya Investments LLP— offered to buy up 100 per cent of BOC shares at Sh63.50 apiece, thus valuing the deal at Sh1.2 billion. Mr Patel is also the single largest shareholder in Carbacid with a 40.38 per cent stake.
BOC’s major shareholder, BOC Holdings, had committed to selling its 65.38 per cent stake in the company, offering crucial backing to the deal.
The deal was announced on November 25, 2020, but was later challenged at the tribunal in March 2021 by BOC’s minority shareholder Ngugi Kiuna, who argued that Carbacid undervalued the target company with its offer price.
The offer price of Sh63.50 has also been eclipsed by BOC’s actual trading price at the Nairobi Securities Exchange (NSE), with the stock closing at Sh70 yesterday.
Vacancies at the tribunal, which are supposed to be filled through the Judicial Service Commission (JSC), have held up the conclusion of the challenge, leaving the transaction in limbo.
Besides Mr Kiuna’s tribunal challenge, the deal also faced another objection from a separate minority shareholder who filed an application at the High Court.
The hurdles at the regulator level mirror the troubles BOC faced when it launched its own takeover bid of Carbacid in 2005, but which collapsed in October 2009 on regulatory roadblocks.
The challenge to the Carbacid-BOC deal is among a number of pending matters before the tribunal that have been held up due to the quorum hitch, among them challenges to enforcement action by the CMA against executives and individuals who have flouted various market rules.
Chase Bank directors, former National Bank of Kenya Officials, Real People executives and Imperial Bank owners are among those who have filed cases fighting regulatory fines at the markets tribunal.
The regulator is also facing an appeal against financial penalties by individuals implicated in the insider trading saga during the sale of KenolKobil to French firm Rubis Energie.