Billionaire acquires 6.6 million shares in NIC

NIC-CBA merger
PHOTO/COURTESY: Kenyan Wallstreet

Billionaire investor Baloobhai Patel has acquired a one percent stake, valued at Ksh. 185 million, in lender NIC Group, the bank’s July Regulatory Fillings have revealed.

Mr. Patel made the one percent stake acquisition, which translates to 6.6 million shares, ahead of NIC’s planned merger with rival bank CBA which will culminate in the formation of a single entity bank, the third largest in the country in terms of assets.  

NIC will offer current CBA shareholders new shares which will result in the formation of a single lender whose shares will be traded at the Nairobi bourse. Existing CBA shareholders will emerge with a 53 percent stake in the merged bank while current investors in NIC will get a 47 percent equity. Trading of shares in the merged bank was set to begin by the end of September and only time will tell whether the banks’ will meet the set timeframe.  As at the end of yesterday, a single NIC share traded at Ksh. 28, 30 percent below what a single share in the merged banks’ will trade at.

Apart from Mr. Patel, a circular guiding the merger also revealed that NIC’s directors James Ndegwa and his brother Andrew Ndegwa similarly upped their interest in the bank. James increased his stake to 52.5 million shares up from 46.2 million shares last year while Andrew, whose ownership is 11,874 shares less than Andrew’s, increased his stake by a similar margin.

NIC did not however reveal whether the two brothers acquired the extra shares in the open market or whether they accrued as a result of changes in the ownership of their family’s investment vehicles.

The NIC/CBA merger adds to a growing list of local banks who are turning to mergers and acquisitions in an effort to cut down on costs and grow their earnings. The latest deal is Equity Group’s move to acquire a controlling stake in DR Congo based lender Banque Commerciale du Congo (BCDC).

RELATED: NIC Group MD to head unified NIC-CBA unit


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