NIC’s Chief Executive Officer John Gachora is one of the shareholders set to benefit from the share price appreciation associated with the merger with CBA group. Mr. Gachora owns 347,050 shares in NIC group currently valued at KSh12.6 million. The other company directors, James Ndegwa and Andrew Ndegwa, and NIC’s largest investors with 52,578,948 shares and 52,567,074 shares respectively are also expected to reap from their investments.
According to a circular sent to shareholders, Mr. James Ndegwa and Mr. Andrew Ndegwa also own 3,139,380 shares and 3,486,771 shares in CBA group.
Shareholding structure Post Merger
The NIC- CBA merger process is well on course after the two parties signed the Merger Agreement on 1st March 2019. The two financial institutions are now working toward fulfilling all the conditions set for the union to take place.
The consolidation of NIC bank and CBA will benefit investors, the banks’ customers and their employees. Investors will gain from increased revenue and lowered expenses mainly due to economies of scale. The banks’ clients will enjoy the increased network of branches and ATMs as well as access to diverse products and services. Lastly, their employees will have more room for career growth given the big size of the new entity.
Faida Investment Bank, the independent Financial Adviser on the proposed merger gave their approval for the transaction saying, “Further to our analysis, after carefully considering all the information available to us, and based on the market, economic and other relevant considerations prevailing as at 8th February 2019, and subject to our terms of reference, we are of the opinion that the proposed merger ratio of 47 percent (NIC Group): 53 percent (CBA Group) is fair and within the range of our valuation results.”
NIC group has 703,940,164 ordinary shares listed at the NSE. After the merger with CBA group, 793,804,865 new shares will be issued to CBA investors. According to a circular issued to NIC investors, the new shares will be entered into the official list of the Nairobi Securities Exchange on or around 1st August 2019.