KCB Group Plc has appointed Paul Russo as the designate managing director for the National Bank of Kenya (NBK) ahead of the final takeover later this week.
In a statement to media, KCB Group said Russo will manage NBK for the transitional 2-year period of its integration into KCB, subject to fit and proper approval by the Central Bank of Kenya (CBK).
Russo - who is the KCB Group director of regional businesses— will lead the transition team that will report to the KCB Group MD Joshua Oigara.
“We are confident that we shall conclude this process shortly following the receipt of the necessary approvals. We have received a good indication from NBK shareholders and we shall announce the official results within the legally stipulated timelines so as to get into the next steps of the transaction,” Oigara said.
He added that KCB Group has embarked on verification of the returns by the shareholders.
The developments come a day after the CBK said that it had no objection to KCB Group planned acquisition of 100 per cent stake in NBK in an offer to shareholders which closed on Friday, August 30, 2019.
The CBK approval followed the one by the Competition Authority of Kenya which last week granted approval to East Africa's largest bank by assets to finalize the deal.
The transaction is subject to regulatory approvals pursuant to regulation 4(1) of the Capital Markets (Take-overs and Mergers) Regulations, 2002.
The acquisition is part of KCB’s ongoing strategy to explore opportunities for new growth while investing in and maximizing the returns from the Group’s existing businesses.
It is anticipated that upon acquisition, NBK will continue to operate as a subsidiary of KCB Group for a maximum period of two years.
“We have set a target to fully integrate NBK into KCB in 24 months from acquisition. During that period, we will be taking a number of integration decisions including how to best structure NBK in order to more excellently deliver value to our customers,” Oigara said.
In July, National Bank board reluctantly approved the buyout saying that KCB Group undervalued the company by almost 38 per cent in the proposed takeover offer.
The board, in the advisory circular to its shareholders, said the fair valuation is one KCB share for every 6.23 NBK shares and not 1 for every 10 as offered.
The Offer requires that the 1,135,000,000 preference shares in the capital of the Bank held by the two principal shareholders – the National Treasury (“GOK”) and National Social Security Fund (“NSSF”) should be converted on a one/one basis into 1,135,000,000 new ordinary shares at the Completion of the Take Over Bid.
The acquisition – the tenth in Kenya’s banking history – is expected to buttress the Group’s position as the largest bank by asset base in the East African region.
