The family of former Cabinet minister Nicholas Biwott is set for a major windfall in a planned Sh35.6 billion buyout deal of KenolKobil by a French firm.
But the Capital Markets Authority late yesterday put a damper on the planned deal after in froze accounts suspected of insider trading, pending investigations.
“Through its market surveillance the authority identified potentially irregular trading of the KenolKobil counter in the run up to the issue of the Notice of Intention by Rubis Énergie,” said the regulator in a statement.
KenolKobil in a deal announced earlier is poised to be acquired by French firm Rubis Energie in the deal to be completed by March 2019.
The oil marketer is majority owned by the Biwott family. Mr Biwott, while serving as minister for Energy during the Moi era, acquired the assets of Mobil when it left the Kenyan market through Kobil, which later merged with Kenol.
Rubis Energie said it had completed the acquisition of a 24.99 per cent stake from KenolKobil’s largest shareholder – Wells Petroleum Holdings – and has made a bid to acquire the remaining 75.01 per cent stake from the other shareholders.
The completion of the transaction will see the company delist from the Nairobi Securities Exchange (NSE), adding to the number of companies that have left the bourse in recent years.
The firm has offered to buy Kobil’s shares at Sh23, a premium over the Sh15.30 that the share was trading at on Tuesday, but which rose substantially yesterday and at some point touched a historical high of Sh21.75
The Frenchmen said they had received a commitment for the sale of shares from some of the key shareholders, including the current chief executive, David Ohana.
“Rubis Energie acquired a stake of 24.99 per cent in KenolKobil. That transaction was completed yesterday and after that, the board of Rubis met and decided that they will launch a takeover of the remaining shares. This morning we served on the firm the intention to take over the company,” said Paras Shah, a partner at Bowmans Law, the lead legal adviser in the transaction.
“The price at which Rubis has offered to buy these shares is Sh23, a significant premium on the trading price in the last few days. It is going to be the largest takeover deal in Kenya… the transaction value is in the region of Sh35 billion.”
With a 24.99 per cent stake, Wells Petroleum, together with Petro Holdings (12.91 per cent), and a few other shareholders control more than 60 per cent of KenolKobil. Retail shareholders have a 35 per cent stake. Christian Cochet, the chief executive of Rubis Energie, said the acquisition would give the company a footing in the region, where it currently lacks a presence.
It has operations in Europe, the Caribbean and parts of Africa. Mr Cochet said Rubis planned to grow the oil marketer’s operations generically but also said he was open to more acquisitions. The exit of major shareholders has been a subject of speculation for some time now, especially following the 2012 failed takeover bid by Swiss firm Puma Energy.
The successful sale of the company would mean that the KenolKobil brand will disappear in the coming months and in its place will be Rubis.
It will also mean that the retail petroleum space will be dominated by foreign firms.