Former Bank of China chief Ngugi Kiona raised his stake in the company to 11.2% in the year to March 2024 from 8.56% the previous year, putting it above the threshold required to prevent a compulsory purchase of his shares in the subject company. From the takeover offer.
BOC's 2023 annual report shows that he acquired 521,400 shares in the company over a 12-month period, currently worth Sh44.84 million.
Purchasing shares helped increase his stake in the company by 31.2 percent to 2.19 million shares, compared to 1.67 million in March 2023.
Mr Kiona, the company's second-largest shareholder behind BOC Holdings (UK), has built up his stake over the past three years as he fights off a proposed takeover bid for the company through a joint bid by fellow listed gas industry Carbacid Investments Plc and Aksaya. Investments LLC
The Takeovers and Mergers Act allows a buyer to make a mandatory buyout of minority shareholders once they acquire at least 90 percent of the company. Purchased minority shareholders are compulsorily paid either the market value of their shares or the amount offered to other shareholders, whichever is higher.
By raising his stake to 11.2 per cent, Mr Kiona is now protected from this mandatory takeover, meaning Carbacid and Aksaya will have to negotiate a price they agree to if the takeover goes through to completion.
He also has the option of remaining a minority shareholder but at the risk of holding illiquid shares in the event that Bank of China is delisted from the Nairobi Stock Exchange.
The deal was first announced in November 2020 and was expected to close by July 2021.
Mr Kiona petitioned the Capital Markets Court in March 2021 to block the payment of damages, saying the Capital Markets Authority erred when it approved the takeover by ignoring the undervaluation of BOC Kenya and also ignoring the protection of the company's minority shareholders.
As of March 2024, the matter was still pending before the court, BOC Kenya said in its annual report. Therefore, the deal remained suspended pending the completion of legal procedures.
Carbacid and Aksaya offered BOC Kenya shareholders Sh63.50 per share, valuing the entire deal at Sh1.2 billion. The two entities also obtained a commitment to sell from majority shareholder BOC Holdings, which holds a 65.4% stake in the company.
In January 2021, an independent financial consultant appointed by BOC to review the offer said the company was worth at least Sh91.76 per share or a total of Sh1.7 billion.
The company closed trading at Sh86 per share on the Nairobi Stock Exchange (NSE) yesterday, giving it a market capitalization of Sh1.68 billion.