Corporate News
Housing Finance managing director Frank Ireri. PHOTO | FILE
By VICTOR JUMA, vjuma@ke.nationmedia.com
In Summary
Housing Finance has sold 10 million shares of insurance group Britam in a transaction that could have earned the mortgage company more than double its initial investment.
Regulatory filings by the company show that Housing Finance
(HF) sold the shares about mid this year, a move that helped boost its
first half financial performance.
HF bought the Britam shares for Sh90 million during
the insurer’s 2011 IPO that was priced at Sh9 per share, and even
though it is not clear how much the mortgage firm sold the shares, they
are currently worth Sh237.5 million going by the prevailing market
price.
HF managing director Frank Ireri declined to comment on the transaction when contacted on Friday.
Britam has announced an intention to acquire a 24.7 per cent stake in HF currently owned by Equity Bank, and it is not clear whether the two transactions are related.
The sale of shares saw HF drop from Britam’s list
of top local institutional investors where it was previously ranked
sixth with a 0.5 per cent stake.
The mortgage firm’s financial statements show that
it had classified the shares as “available-for-sale,” which signaled the
intention to liquidate them.
It had valued the securities at Sh80 million in
June last year, which rose to Sh151.5 million in December, tracking
Britam’s share price rally that was sparked by an announcement that the
insurance group would acquire a rival firm.
Britam’s share price has nearly tripled in the past
12 months to trade at Sh23.75. Britam itself already holds a 21.46 per
cent stake in HF.
The insurance group announced an intention to buy
Equity Bank’s 24.76 per cent stake in a transaction valued at an
estimated Sh2.2 billion, a move that will raise its interest in the
mortgage firm to 46 per cent where it can gain control over HF’s
strategic direction.
Housing Finance’s share price has gained 77 per
cent in the past one year to trade at Sh44.75, helped partly by the news
of Britam’s bid for a larger stake in the housing financier.
The impending deal is the latest that has helped drive Britam’s share price rally in the past one year.
The company recently concluded its 99 per cent acquisition of Real Insurance in a cash-and-stock deal worth Sh1.3 billion.
The Real buyout followed an acquisition of a 25 per
cent interest in property development firm Acorn Group for an estimated
Sh300 million.
Britam is also eyeing a larger stake in Equity Bank where its ownership currently stands at 10.1 per cent.
Britam is also eyeing a larger stake in Equity Bank where its ownership currently stands at 10.1 per cent.
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