The National Bank of Kenya #ticker:NBK majority shareholders — the National Treasury and the National Social Security Fund (NSSF) — are supporting the lender’s takeover by KCB Group #ticker:KCB through a share swap deal.
Endorsement by the two institutions means the transaction is set to go through since the remaining National Bank of Kenya (NBK) shareholders control a minority 6.77 percent stake combined.
Treasury and NSSF, which have a 93.23 percent interest in NBK, are also among the largest investors in KCB.
“Furthermore KCB’s two most significant shareholders happen to be the two most significant shareholders at NBK. It is also the government policy to support mergers within the banking sector in order to create strong players who will support the realisation of Vision 2030,” NBK’s chairman Mohamed Hassan wrote to shareholders in a circular.
“Therefore, the board and management of NBK are of the view that, subject to agreement of terms and shareholders and regulatory approvals, the successful completion of the proposed transaction would be of great benefit to all the customers and stakeholders of NBK and KCB.”
Mr Hassan added that the board unanimously recommend that the shareholders vote in favour of the deal.
The NBK says the proposed transaction currently values each of its shares at either Sh3.78, Sh4, and Sh4.49 based on various scenarios.
“The information on the strike price is yet to be advised, but it is expected that this will be calculated based on the volume weighted average share prices for the immediate preceding 90 calendar days (or such other period that will be advised) up to and including the date preceding the date of the offer’s statement (May 6, 2019),” NBK said.
It is expected that NBK investors will end up with shares equivalent to a 4.59 percent stake in KCB.