Similar takeovers happened in 2008 when the Capital Markets Authority approved a request by Brooke Bond to buy out minority shareholders of Unilever Tea (K) Ltd.
Brooke Bond had an 88.24 per cent stake in Unilever Tea, which had interest in vast tea estates in Rift Valley, and had sought to buy out the balance of 5.75 million shares, each valued at Sh62.
But the massive cash required by employees to conclude the deal could be a big set back for KenolKobil and its major shareholders.
As a result, the two parties may change terms of the tentative deal, which was announced a month ago, to accommodate the fresh demands.
Many analysts had considered the takeover accomplished, because all major issues appeared to have been resolved until the Industrial Court blocked the sale a fortnight ago over a dispute between KenolKobil and its employees.
Experts say that if the situation is not handled well, it might create differences that may leave the two oil dealers unable to agree terms.
“When shareholders are selling the company, there is need to inform employees of likelihood of change,” says Karugor Gatama, the chief executive of Africa Corporate Governance Advisory Ltd.
KenolKobil’s chairman of board of directors and chief executive, Jacob Segman, declined to talk about the issue, but referred Business Weekly to the company’s lawyer, Desterio Oyatsi.
The employees of KenolKobil — who want their terms of employment agreed before the deal is settled —have cited a similar takeover of petroleum company, BP in Southern Africa in which the Swiss company parted with $296 million, and thereafter laid off employees massively.