Britam to issue shares for the purchase of Real Insurance
Britam building situated at Upper Hill in Nairobi. The firm intends to purchase 99 per cent of Real Insurance. FILE
What you need to know:
Britam has disclosed that it intends to purchase 99 per cent of Real Insurance.
The firm intends to issue new shares to shareholders of Real Insurance.
Financial services firm Britam has entered into an agreement that will see it purchase Real Insurance, a midsize insurer in a deal whose value is yet to be disclosed.
The Nairobi Securities Exchange (NSE) listed company which has interests in insurance, real estate and asset management has disclosed that it intends to purchase 99 per cent of Real Insurance.
Even though finer details of the transaction are yet to be disclosed, Britam said that as part of the deal, it intends to issue new shares to shareholders of Real Insurance.
“Part of the consideration is intended, subject to all requisite regulatory approvals, to be satisfied by an issue of shares in Britam to the shareholders of Real,” said Nancy Kariuki, company secretary Britam, in a public notice on Saturday.
Britam has two main subsidiaries – British American Insurance and British American Asset Managers – while Real Insurance has operations in Tanzania, Malawi and Mozambique.
British American Insurance controlled 4.36 per cent of the market in terms of gross written premium as at the end of December last year while Real Insurance controlled 3.10 per cent according to the Association of Kenya Insurers (AKI).
According to AKI, British American Insurance had net assets worth Sh6.67 billion as at December 2012, making it the largest in the country compared to Real Insurance’s 638.73 million.
“Britam…has entered into a preliminary agreement that will upon execution of a definitive share purchase agreement and completion of customary conditions including receipt of all requisite regulatory and shareholders’ approval, culminate in in Britam acquiring a 99 per cent shareholding in Real Insurance,” said Ms Kariuki in the public notice.
She said, in the notice that the transaction will enable Britam to implement its strategy in expanding its general insurance business and diversify its presence into key geographical areas that include growing frontier markets.
Britam, which has 1.89 billion issued shares, saw its stock close at Sh13.20 after hitting a new record high of Sh13.30 on Friday, along with other counters whose shares have been on an upward trend over the past month.
Its value stood at Sh24.96 billion as at the close of trading, the stock having more than doubled this year from Sh6, its closing price at the end of last year.
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