The huge stake held by the government in National Bank of Kenya (NBK) #ticker:NBK will see the lender delisted from the Nairobi Securities Exchange (NSE) without holding a meeting to seek shareholder approval ahead of its buyout by KCB Group #ticker:KCB.
In takeovers of publicly traded firms, the target company is usually required to vote on whether or not it should be delisted prior to its acquisition.
This is designed to ensure that dissenting investors are given an opportunity to exercise their option of declining the offer and remaining part owners in a listed company.
However, since the government controls a combined 93.23 percent stake in the NBK through the Treasury and National Social Security Fund, the lenders have decided to skip a delisting extraordinary general (EGM) meeting for NBK shareholders due to government’s support of the buyout.
“One of these conditions (of the offer) is that the NBK shareholders should approve the de-listing of NBK from the NSE. This would require an EGM and because none is planned, KCB will be required to waive this condition,” NBK says in a circular to shareholders.
The government’s stake has cleared the path for KCB to complete the acquisition in record time.
Failure to hit the 90 percent threshold has derailed delisting plans of NSE firms such as Unga Group #ticker:UNGA and Express Kenya #ticker:XPRS.
KCB will also be in a position to forcefully buy out any dissenting NBK shareholder.
“If the offer is accepted by NBK shareholders holding 90 percent of the offer shares, KCB intends to apply the provisions of the Take-Over Regulations and Part XXIV, Division 4 of the Companies Act, 2015 to compulsorily acquire the remaining shares of NBK,” KCB says in its takeover document.
The offer, at the rate of one KCB share for 10 NBK shares, opened on Wednesday and will close at the end of next month.
Listing of the additional KCB shares, that will be allotted to existing NBK owners, will be on September 16.