Kenya’s Central Bank has approved the takeover agreement between KCB group and the National Bank of Kenya. KCB offered to acquire the troubled lender in a share swap agreement. Shareholders of two institutions have endorsed the transaction in which NBK investors will gain one share in KCB group for every ten shares they hold in NBK.
CBK governor Dr. Patrick Njoroge said that the offer by KCB is the only viable option for National Bank. The governor emphasized the importance of the takeover deal saying,
“The resolution of NBK is urgent.” “If there is a misstep, it would be significant to the financial sector, 650,000 customers, the implications of this would be significant,” he added.
Even with CBK’s approval, the transaction faces another hurdle after two petitioners moved to court to stop it from going through claiming that the takeover will result in job losses. They also demand that the auditor general conducts an audit on National Bank to establish the bank’s financial status and value before the acquisition.
Speaking at KCB group’s AGM, the firm’s CEO Mr. Joshua Oigara informed investors that the planned acquisition is backed by solid findings. According to a due diligence report by KCB group, the troubled bank has great potential, despite its current problems.
Mr. Oigara revealed that they plan to fire NBK’s board and management team after they acquire the bank. “The board does not intend to keep the management of NBK. The board has no intention of keeping the NBK board,” said the Chief Executive.
