Centum abandons plan to sell Sidian Bank to Nigerian Lender

  • Centum Investment Company has aborted its plans to sell its majority stake at Sidian Bank to Nigeria’s Access Bank PLC after a time lapse in effecting the $34 million deal.
  • The Long Stop Date of the Share Purchase Agreement has passed without all the conditions being fulfilled or waived, despite the support and guidance of the Central Bank of Kenya.
  • Furthermore, Centum has not been able to reach acceptable terms with Access Bank PLC for a further extension of the Share Purchase Agreement.

Kenya’s Centum Investment Company has aborted its plans to sell its majority stake at Sidian Bank to Nigeria’s Access Bank PLC after a time lapse in effecting the $34 million deal.

Centum Chief Executive Officer James Mworia said the Long Stop Date of the Share Purchase Agreement has passed without all the conditions being fulfilled or waived, despite the support and guidance of the Central Bank of Kenya.

“Further, Centum has not been able to reach acceptable terms with Access Bank PLC for a further extension of the Share Purchase Agreement and has opted not to pursue extension of the same. The Share Purchase Agreement has therefore lapsed in accordance with its terms, and it stands terminated,” the statement reads.

In June 2022, the firm announced that it had entered into a conditional Share Purchase Agreement to sell all of its shareholding in Sidian Bank Limited to Access Bank PLC. Centum holds 83.4 percent of the issued shares of Sidian directly and indirectly through its wholly owned subsidiary, Bakki Holdco Limited.

“The shareholders of Centum and the investing public are hereby notified that Centum will continue as a shareholder in Sidian following this termination of the Share Purchase Agreement,” Mworia added.

Nigeria’s Access bank was to acquire Centum’s 83.4 percent stake in Sidian Bank two years after it entered the Kenyan Market.

Access Bank entered the Kenyan market by acquiring a 99.8 percent stake in Transnational Bank with assets of more than USD2 5.5 billion. This is part of its plan to increase its presence in the African market, having acquired South Africa’s GroBank and Zambia’s Cavmont Bank. The lender has operations in 12 African countries and representatives in China, UAE, Lebanon and India.

“Sidian is a profitable bank with a well-cut-out niche market that makes it one of the choice assets in Centum’s portfolio,” said Mworia.

Meanwhile, Centum planned a share buyback intended to provide liquidity for owners of the dual-listed firm as well as reward long-term shareholders of the company whose proportionate holding will increase as a result of the share repurchase.

The firm has called a shareholders’ Extraordinary Meeting (EGM) to approve its planned share buyback to be held electronically on February 3, 2023 following regulatory approval.

“The buyback plan offers investors with a long-term view of the Centum stock to benefit from potential improvement in future earnings and capital gains,” said the Centum Group CEO James Mworia.

Up to 10 percent of the firm’s issued and paid up share capital will be eligible for repurchase by the company at a maximum price of Sh9.03 per share and a minimum offer price of Sh0.50 per share in accordance with the Capital Markets Authority ( CMA) Guidelines.

The share buyback is expected to enable the company to achieve alignment of shareholding to the long term value objectives of the company by offering an opportunity to those investors who may wish to cash out while rewarding those who wish to remain as shareholders.

Centum is primarily listed on the Nairobi Securities Exchange (NSE), with a cross-listing on the Uganda Securities Exchange.

Leave a Comment