Centum bids for majority stake in K-Rep Bank

Corporate News

 

A K-Rep Bank branch on Kenyatta Avenue in Nairobi. The investment firm Centum has announced its intention to raise its stake in the bottom-tier bank. PHOTO | SALATON NJAU  

By VICTOR JUMA, vjuma@ke.nationmedia.com

In Summary

• Centum has opened negotiations to acquire a 66 per cent stake in the bottom-tier bank whose value the transaction advisers estimated at Sh2.5 billion.
• The transaction, if successful, will raise Centum’s stake in the lender to Sh67.54 per cent. The investment firm has been a minority shareholder in K-Rep since 2004 with a 1.66 per cent stake.
• Centum expects to complete the transaction in the next four months and will own the stake through a non-operating holding company.

Investment firm Centum on Thursday announced plans to enter the lucrative financial services market with a multi-billion-shilling bid for a controlling stake in K-Rep Bank.

 

Share This Story

1
inShare

Centum said it had opened negotiations to acquire a 66 per cent stake in the bottom-tier bank whose value the transaction advisers estimated at Sh2.5 billion.

“We are pleased to announce the intended acquisition of an additional 66 per cent shareholding in K-Rep Bank from several existing shareholders,” the company said in a statement.

The transaction, if successful, will raise Centum’s stake in the lender to Sh67.54 per cent. Centum has been a minority shareholder in K-Rep since 2004 with a 1.66 per cent stake.

READ: Centum paid Sh1 billion for stake in Genesis.

The press statement said Kabiru Kinyanjui, one of the bank’s founders, is also set to raise his stake alongside Centum, signalling that one of the foreign institutional investors may be exiting K-Rep.

Prof Kabiru’s investment vehicle K-Rep Group Limited is expected to raise its stake in the bank to 22 per cent, the statement said without disclosing its current position.

The twin transactions, if successful, will push local ownership of the bank to 89.54 per cent. K-Rep has a large number of foreign owners, including the International Finance Corporation (IFC) and South Shore Bank of Chicago.

The African Development Bank, Triodios (a Dutch non-governmental organisation), and the Netherlands development finance institution (FMO) also have stakes in the bank.

Centum’s bid for a controlling stake in K-Rep is the latest sign of how attractive small and medium-sized banks have become to institutional investors looking for growth opportunities in the medium and long term.

Financial services firm Britam is, for instance, set to buy Equity Bank’s 24.76 per cent stake in mortgage firm Housing Finance for an estimated Sh2.2 billion.

READ: Equity keeps rivals guessing as it exits Housing Finance

London-based Atlas Mara, founded by former Barclays Plc’s CEO Bob Diamond, has recently announced plans to enter the local banking market.

Centum expects to complete the transaction in the next four months and will own the stake through a non-operating holding company.

K-Rep was licensed as a commercial bank in 1999 and has registered steady growth over the years. The lender’s total assets were valued at Sh13.9 billion in March.