Nedbank Group Ltd. has completed its takeover offer for a 66% controlling stake in NCBA Group Plc, giving the South African lender a base in East Africa, the companies said in a statement on Monday.
Nedbank put the total purchase consideration at about 13.9 billion rand ($800 million), based on a Nedbank issue price of 250 rand per share. The shares are due to change hands in a block trade on the Nairobi Securities Exchange on Nov. 3, and settlement begins the same day. NCBA becomes a Nedbank subsidiary but stays listed in Nairobi, with the remaining 34% held by the public.
The offer was priced at 105 shillings a share, about 1.4 times book value, for roughly 1.087 billion NCBA shares. Consideration is 20% cash and 80% new Nedbank shares. Shareholders entitled to fewer than 200 Nedbank shares, roughly those holding under 9,400 NCBA shares, get cash only. The price is a premium of about 17% to where NCBA traded before the deal was announced in January. Nedbank’s KSh 105-per-share Offer for NCBA Opens 28 May +3
Oversubscribed
Shareholders tendered 1,316,357,895 shares, or 79.9% of the issued capital, by the time the offer closed on July 10. That is well above the 66% Nedbank sought. Excess acceptances were scaled back pro rata, so roughly 83% of tendered shares were taken up.
Approvals
Kenya’s Capital Markets Authority exempted Nedbank from a mandatory full offer on Feb. 19. The Central Bank of Kenya approved the acquisition in early September. Other clearances included the South African Reserve Bank’s Prudential Authority, the National Bank of Rwanda, the Bank of Tanzania, and competition authorities at COMESA, the East African Community, Tanzania and ECOWAS. Nedbank secures Kenyan waiver to acquire 66% of NCBA +2
Timeline
NCBA shares will be suspended from around the close of business on Oct. 21 until the close on Nov. 2 so the share register can be reconciled.
Continuity
NCBA said it will keep its brand, local leadership, Nairobi headquarters and customer-facing model, and that products, branches and digital channels won’t change.
“The name is the same, the people are the same, but the ambition and capabilities are tremendously magnified,” NCBA Chief Executive Officer John Gachora said.
“This landmark transaction establishes a significant presence for Nedbank in East Africa and marks a decisive step forward in our African growth strategy,” Nedbank CEO Jason Quinn said.
NCBA says it serves more than 60 million customers through 122 branches. It operates in Kenya, Uganda, Tanzania, Rwanda and Ivory Coast, and has a digital lending business in Ghana. Nedbank has physical operations across Southern Africa, including Namibia, Zimbabwe, Mozambique, Lesotho and Eswatini.