• KCB will largely benefit from NBK’s about Sh 100 billion customer deposits and huge value in property assets.
• The acquisition would be by share swap of 10 ordinary NBK shares for one ordinary KCB share.
MPs have decided to investigate the National Bank takeover deal by Kenya Commercial Bank.
The Finance and National Planning Committee chaired by Kipkelion East MP Joseph Limo has 60 days to present a report to the House, following a directive from Speaker Justin Muturi.
The committee is expected to start its work on Wednesday. Nyatike MP Tom Odege questioned the move.
The legislator on Friday 3rd May 2019 raised doubts over the proposed takeover for lack of public participation and sought to know whether NBK, was properly valued at Sh 5 billion and if pensioners and taxpayers interests are protected.
The legislator also wants clarity on why only one buyer was given purchase rights especially given that the disposal of NBK involves a publically owned asset for all intents and purposes.
He has also demanded an explanation on why the rights issue proposed and approved was never carried out yet the argument then was that the two anchor shareholders could not agree on the valuation of preference rights before conversion to ordinary, a matter which seems to have been resolved as per the requirements of the offer from KCB.
“Government ought to intervene so as to safeguard her interests and those of pensioners and employees and ensure that the takeover is done in an open manner where public participation is conducted and stakeholders are involved,” the Nyatike legislator said in parliament.
If actualised, KCB will largely benefit from NBK’s about Sh 100 billion customer deposits and huge value in property assets.
The takeover announcement means that Treasury has made a decision on its 1.135 billion preferential shares it holds in NBK jointly with the National Social Security Fund (NSSF), a decision the two shareholders were unable to resolve when the bank proposed a KES 10BN rights issue in 2013.
According to the statement by KCB, the acquisition would be by share swap of 10 ordinary NBK shares for one ordinary KCB share.
KCB might have a challenge convincing its shareholders on the benefit of buying a bank with many liabilities. It is understood that minority NBK shareholders will be forced to sell their shares cheaply in exchange for KCB shares.