National Bank of Kenya (NBK) shareholders are set to lose at least 30 percent of their share value if Kenya Commercial Bank (KCB) succeeds to acquire the bank.
In its latest proposal, KCB intents to buy the NBK’s shares at Sh3.8 per share down from the current prices of Sh4 per share. This has seen NBK officials show concern arguing that the move will highly undervalue the bank by approximately 38 percent.
According to the NBK Directors, one KCB share should be equivalent to 6.23 NBK share and not ten as proposed.
KCB Group intends to acquire 1,473,781,200 ordinary shares of NBK in exchange for 147,378,120 KCB shares. After the acquisition, National Bank investors will hold a 4.59 per cent stake in KCB Group.
KCB further valued the bank at Sh5.6 billion as opposed to the figures reported by an independent group that recorded a Sh9 billion.
The board, however, has remained with limited options as no investor has shown interest in acquiring the bank, hence seeking advice from shareholders on whether to proceed with the offer.
The troubled bank was started in 1968 with 48.1 percent of its shares being owned by the National Social Security Fund.
Previously, the government had proposed to sell part of the bank to an investor in a bid to ease its financial challenges, but the shareholders turned down the request.
National Bank expects the purchase deal to be completed by 25th August if all goes per the plan.