Kenyan lender KCB Group’s takeover of state-backed National Bank of Kenya will go ahead if its offer is accepted by 75 per cent of shareholders, the market regulator said on Thursday.
The comments by the Capital Markets Authority (CMA) came in response to a call by some lawmakers for the government to reject KCB’s offer.
KCB, Kenya’s biggest lender by assets, offered to buy struggling National Bank (NBK) in April through a share swap of one KCB share for every 10 shares of NBK.
Parliament’s finance committee said in a report on Wednesday that the government, National’s main shareholder, should reject the offer as it undervalues National Bank.
That appeared to throw up a barrier to the deal, which is set to close at the end of this month.
The CMA shrugged off the committee’s report, saying the takeover is subject to regulations on takeovers and mergers of listed firms, and is insulated from government interference.
Under those rules, the takeover needs to be supported by 75 per cent of NBK shareholders.
“The Authority approved the Shareholders Circular shared with NBK shareholders with details about the offer from KCB.
“It is then up to the NBK shareholders to accept or reject the offer,” the CMA said in a response to a Reuters query.
“If the threshold for acceptances is not met then the offer fails but if it is met it is deemed successful.”
KCB said it had sought a meeting with lawmakers to discuss the transaction in the wake of the finance committee’s report.
“NBK shareholders have already received the offer documents and we remain optimistic that we shall receive positive responses,” the group said in a statement.
Both the central bank and the Treasury, which together with the state pension fund hold more than 70 per cent of NBK, have backed the takeover, saying it is the only way of rescuing NBK from perennial liquidity challenges.
Acting Finance Minister Ukur Yatani reiterated the government’s support for the deal on Thursday, saying there was a need for “strong and stable banks” to support the country’s fiscal position.
He added that all interested parties, including parliament were being consulted.
KCB, which also operates in Tanzania, Uganda, Rwanda, Burundi and South Sudan, has been looking to bolster growth via acquisitions. (Reuters/NAN)
Moghalu decries Nigeria’s continued dependence on oil
Prof. Kingsley Moghalu, a presidential candidate for the Young Progressives Party (YPP) in the 2019 presidential election, has expressed concern about the nation’s reliance on oil as a major source of revenue generation.
He recommended technology and innovation as alternatives, citing the examples of developed countries.
He stated this in Abuja, at the 10th Nigeria Meritorious Service Award and Nigeria Political Achievers Award organised by the Federation of West African Freelance Journalist Association.
The event, which ended late Friday night, was organised to honour some Nigerians who distinguished themselves in politics and other fields.
Moghalu, a former Deputy Governor of the Central Bank of Nigeria (CBN), said that oil belonged to ”the distant age; the world today is of technology, innovation and science”.
According to him, the country needs government that will give youths a sense of purpose and employment to achieve their destinies.
“In the future, we don’t have to continue the political system the way it has always been,” Moghalu said.
He observed that political leaders should be judged by their achievements in office in terms of job creation and economic growth.
”To have the desired change in the country, every Nigerian most change the way they think and act,” he advised.
He also advised that the CBN ought to be truly independent to ensure enhanced performance.
According to him, when independent institutions such as the CBN gets directives that may serve transient political purpose, the long term effect may not be the best for the country.
Edited by Kayode Olaitan
CBN injects $297.92 into secondary market
The Central Bank of Nigeria (CBN), has injected 297.92 million dollars into the retail Secondary Market Intervention Sales (SMIS).
The bank’s Director, Corporate Communications Department, Mr Isaac Okorafor made this known in a statement in Abuja on Friday.
Okarafor disclosed that CBN also injected CNY21.2million in the spot and short-tenured forwards segment of the inter-bank foreign market.
According to him, the United States dollars-denominated transactions are to meet requests in the agricultural and raw materials sectors, while those in Chinese Yuan are for Renminbi-denominated Letters of Credit.
The director reiterated that the bank’s management was satisfied with the continued stability in the foreign exchange market.
He assured that the CBN remained committed to meeting foreign exchange needs of all sectors of the economy.
Meanwhile, N358 was exchanged to a dollar, while CNY1 exchanged at N46 at the Bureau De Change (BDC) segment of the foreign exchange market on Friday.
No electricity tariff increase has been approved yet —— NERC
The Nigerian Electricity Regulatory Commission (NERC), says no tariff increase has been approved by the commission yet.
In a statement, Mr Usman Arabi, NERC’s General Manager, Public Affairs, however, in a statement on Friday in Abuja said it was still consulting with stakeholders.
He said that the commission wished to notify the public that no tariff increase had been approved by the commission contrary to the impression in some quarters.
“However, the commission in the discharge of its statutory responsibilities enshrined under the Electric Power Sector Reform (EPSR) Act, shall continue to undertake periodic reviews of electricity tariffs in accordance with prevailing tariff methodology.
`In all instances of such reviews and rule-making, the commission shall widely consult stakeholders and final decision shall be taken with due regard of all contributions,” he said. .
Arabi said that the commission wished to provide guidance that the minor review implemented by the commission was a retrospective adjustment of the tariff regime released in 2015
He said that this was to account for changes in macroeconomic indices for 2016, 2017 and 2018, “thus providing certainty about revenue shortfall that may have arisen due to the differential between tariffs approved by the regulator and actual end-user tariffs,” he said
NSE: Market indices upbeat, up by 0.62%
Trading on the Nigerian Stock Exchange (NSE), for the third consecutive days, maintained a bullish trend to close the week upbeat.
The Nigeria News Agency reports that the crucial market indices on Friday appreciated further with a growth of 0.62 per cent.
Specifically, the market capitalisation of listed equities inched N33 billion or 0.62 per cent to N13.524 trillion from N13.441 trillion achieved on Thursday.
Also, the All-Share Index rose by 170.51 points or 0.62 per cent to close at 27, 800.17 points against 27,629.66 posted on Thursday.
An analysis of the price movement table shows that Nestle led the gainers’ table, growing by N10 to close at N1, 230 per share.
Unilever followed with a gain of N2.45 to close at N29.45, Guaranty Trust Bank gained 90k to close at N27.90 per share.
Forte Oil improved by 66k to close at N16, while C & I Leasing also added 60k to close N7.30 per share.
Conversely, Dangote Cement Industry recorded the highest loss to lead the losers’ table, declining by 50k to close at N166.50 per share.
Continental Reinsurance trailed with a loss of 10k to close at N1.50, while Dangote Sugar Refinery was down by 10k to close at N1.30 per share.
Triple Gee lost 7k to close at 63k, while Unity Bank declined by 6k to close at 63k per share.
Similarly, the volume of shares traded closed higher with a total of 1.24 billion shares valued at N3.29 billion in 3,644 deals.
This was in contrast with 272.60 million shares worth N4.49 billion exchanged in 3,425 deals on Thursday.
Sovereign Trust Insurance Plc was the most active stock, trading 900.02 million shares valued at N216 million.
FBN Holding followed with an account of 80.12 million shares worth N401.08 million, while Courtville traded 55.07 million shares valued at N12.11 million.
Access Bank sold 36.42 million shares worth N236.89 million, while Transcorp exchanged 34.56 million shares valued at N36.94 million.
Edited by Olagoke Olatoye