South African giant lender Nedbank Group has submitted a proposal to NCBA Group seeking to acquire 66pc of its ordinary shares through a tender offer.
In a statement, NCBA Group it had received the Strategic Investment Proposal and a Notice of Intention from Nedbank group which will give the South African lender a controlling stake in the bank.
The Nairobi Securities Exchange (NSE) listed bank says the bid is 1.4 times its book value and will see shareholders who will back the offer receive 20pc of their consideration in cash while the remaining 80pc settled through the issuance of Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE).
However the bank will continue trading the remaining 34pc of its shares on the NSE should the deal be approved by regulators.
“Nedbank is an ideal partner for our growth in the East African Region. Nedbank holds around 16-17pc market share of loans in deposits in South Africa, lead in vehicle and commercial property finance with 36pc market sjares each and their overall ESG ratings are to 10pc amongst global peers,” said John Gachora, NCBA Group Managing Director.
The acquisition which will give Nedbank entry into the East African region where NCBA Bank currently operates 122 branches spread across Kenya, Tanzania, Uganda and Rwanda with assets totaling Ksh 665 billion.
NCBA Bank which also operates M-shwari mobile loan platform in partnership with Safaricom Plc has also grown its digital loan book which now exceeds Ksh 1 trillion annually.
“Kenya’s role as a regional financial hub, supported by strong institutions, sophisticated markets and dynamic technology sector, makes it natural anchor for Nedbanks’s East African ambitions, including Rwanda, Tanzania and Uganda,” said Jason Quinn, Nedbank Chief Executive Officer.
The proposed offer in now subject to approval by shareholders as well as the regulators and is projected to be concluded by the fourth quarter of this year.
