Oil marketer KenolKobil #ticker:KENO has amended its employee share ownership plan (Esop) rules, allowing its chief executive David Ohana to sell all of his 88 million shares to French firm Rubis Energie for Sh2 billion.
The Capital Markets Authority (CMA) in November challenged the oil marketer’s move to issue Mr Ohana with 88 million shares, saying the Esop rules allowed him to take up a maximum of 37.25 million shares being 25 per cent of the 149 million units outstanding in the scheme.
This would have seen Mr Ohana earn only Sh856.7 million in the Rubis buyout, which is priced at Sh23 per share. Rubis, in its offer document, now says it is in a position to buy all the 88 million shares from Mr Ohana.
Sources told the Business Daily that trustees of KenolKobil’s Esop amended rules of the scheme to allow Mr Ohana to take up all the shares, a decision that also received approval from the CMA.
“When the Esop trustees realised the share issuance limit, they took action and corrected it,” a source familiar with the matter said.
In the absence of amendments to the Esop rules, the oil marketer would have had to cancel most of the shares that had already been earmarked for the chief executive.
Mr Ohana is now on course to reap a Sh1.1 billion profit in the transaction that is set to close on March 11.
He will exercise his rights to the shares at a price of Sh10.3 each, bringing his total cost to Sh906.4 million. He will then sell the units to Rubis at Sh23 each or an aggregate of Sh2 billion, booking the large profit.
“Mr Ohana agreed that he will exercise his above options, pursuant to which the Esop will allot him 88 million units; and redeem such units and instruct the trustees of the Esop to sell the underlying 88 million shares by accepting the offer,” Rubis said in its offer document released last week.
The buyout, which has been endorsed by KenolKobil’s board, will see Rubis pay a total of Sh35.6 billion to fully acquire the oil marketer and take it private.
This will leave Total Kenya as the only publicly traded oil marketer in the Kenyan market.