WARNING

BOC Kenya issues caution on its share trade

Last month, the firm's board refused to recommend the offer for acceptance by shareholders, saying the offerer undervalued the firm's share price.

In Summary
  • In November last year, Carbacid placed a Sh1.2 billion takeover bid for 100 per cent shares of BOC Kenya
  • Yesterday, the BOC Kenya share price traded at Sh60, 1.27 per cent higher than Friday. 
BOC gas filling plant in Industrial area. Photo/File
BOC gas filling plant in Industrial area. Photo/File

Listed gas firm BOC Kenya has issued a cautionary note to those trading in its shares following an appeal challenging 100 per cent buyout by Carbacid and Aksaya Investments LLP. 

In a statement, BOC it said the Capital Market Act provides that upon any appeal presented to the Capital Market Tribunal the status quo or any matter or activity which is subject of an appeal shall be maintained until the appeal is determined. 

''In the interim, shareholders are urged to exercise caution in dealing in shares of BOC,'' the cautionary statement issued Monday read in part. 

The new development pushed by minority shareholders of the gas firm is likely to delay the planned offer period by Carbacid and Aksaya Investments LLP set for April 6. 

Last November, Carbacid placed a Sh1.2 billion takeover bid for 100 per cent shares of BOC Kenya (NSE: BOC) as part of its market expansion plans, subject to regulatory approvals.

Carbacid chairman Dennis Awori said the acquisition would make BOC locally owned and better positioned to exploit market opportunities in Kenya and the region.

The two firms made an offer price of  Sh63.50 per one ordinary share of BOC which represents a premium, of Sh 4.67 (7.94 per cent) over the 30-day volume-weighted average price per ordinary share.

Although BOC Holdings, which is based in Munich German accepted to sell its 65 per cent majority stake and consequently signed an undisclosed agreement with the purchasers, local minority shareholders opposed the sale. 

Last month, the BOC Kenya Board refused to recommend the offer for acceptance by shareholders, saying it undervalued the firm's share price. 

An independent valuation by Dyer and Blair put the “fair” value of BOC at Sh91.76 billion, which is 44.5 per cent higher than the offer price.

“As the fair value is below the offer price, the offer price is not considered to be fair and reasonable,” Dyer and Blair said. 

The shareholders have faulted CMA for approving the buyout, saying the regulator ignored the undervaluation of BOC besides disregarding the protection of interests of minority shareholders.

They are also worried about impending monopoly in the local market should the transaction go through. 

The shareholders argue that billionaire Baloobhai Chotobhai Patel who owns Carbacid Investment Plc and Aksaya Investments LLP will have a dominant influence in the local market for medical oxygen and industrial gases if he buys BOC

Yesterday, the BOC Kenya share price traded at Sh60, 1.27 per cent higher than Friday.