Customers are seen outside the banking hall at the Kenya Commercial Bank, Kencom branch in Nairobi
Kenyan lawmakers say govt should reject KCB's acquisition of NBK
NAIROBI (Reuters) - A Kenyan parliamentary committee recommended on Wednesday that the government should reject KCB Group's acquisition of the majority state-owned National Bank of Kenya and instead raise capital by selling additional shares.
KCB, which also operates in Uganda, Tanzania, Rwanda, Burundi and South Sudan, is Kenya's largest lender by assets. It made the takeover offer in April, joining a wave of consolidation in Kenya's banking industry.
In May the bank said expected to complete the acquisition by October.
"The principal shareholders ... should not accept the offer by KCB on the acquisition of 100% shares of NBK," said the Parliamentary Committee on Finance and National Planning in a report.
"The National Bank should pursue the rights issue way in order to raise enough capital."
The committee said KCB's offer did not reflect the fair value of NBK.
"KCB gave an offer bid per share price of KSh 3.801 and the total value of NBK at KSh 6 billion ($58 million) against an independent valuation of per share price of Ksh 6.1 and a total value of KSh 9 billion," the report said.
The proposed transaction would be the second major deal among Kenyan lenders since the government capped commercial lending rates in 2016, squeezing lenders' profit margins and forcing them to look at survival strategies, including consolidation.
($1 = 103.4000 Kenyan shillings)
(Reporting by Duncan Miriri; Editing by Hereward Holland/Jan Harvey/David Evans)
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