National Bank Shareholders Approve Conditional Conversion of Preference Shares to Ordinary shares

From right to left: National Bank Managing Director & CEO Wilfred Musau, National Bank Chairman Mohamed Hassan and the bank's company secretary Habil Waswani at the Bank;s 50th Annual General Meeting.
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National Bank of Kenya Limited (NBK) shareholders have overwhelmingly approved the conditional conversion of preference shares into ordinary shares upon the completion of a proposed take-over bid by KCB Group or a competing bid.

According to the offer received by NBK, KCB intends to acquire up to 100% of the ordinary shares of NBK through a share swap of one ordinary share of KCB for every ten ordinary shares of the NBK.

The offer requires that the 1,135,000,000 preference shares in the capital of the bank held by the two principal shareholders – the National Treasury  and the  National Social Security Fund  should be converted on a one/one basis into 1,135,000,000 new ordinary shares at the completion of the takeover bid.

Commenting on the approvals, NBK’s board chairman Mr. Mohamed Hassan said that the bank remains a strong institution with supportive shareholders and customers.   It also receives significant support from regulators.   “The management and staff of NBK have our full support as they continue delivering solutions to customers. The preservation of value remains the most important tenet for all the stakeholders and the board is working with management to ensure that ongoing business initiatives continue unabated,” said Mr. Hassan.

According to the chairman, the take-over bid has outlined several predicating factors. Some of the key factors include the proposal that NBK will continue to operate as a separate subsidiary of KCB (for a while) and therefore service delivery to its customers will remain un-interrupted. Equally, the combined balance sheets of the two banks will increase their capital capacity.

According to Capital Markets Regulations (Take-Overs and Mergers, 2002), NBK shareholders should receive a detailed take-over bid document by KCB in due course. NBK’s board will analyze the bid and give appropriate recommendations to its shareholders. The respective shareholders will make their own decisions.

Finally, the completion of the proposed transaction as a result of KCB’s take-over bid or a competing bid is subject to NBK’s shareholders acceptance as well as regulatory approvals from, amongst others, the Capital Markets Authority, the Central Bank of Kenya, and the Competition Authority of Kenya.

 

 

 

 

 

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