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Biwott’s family to earn Sh14b in takeover deal

Fred Aminga @faminga

The takeover of oil marketer Kenol Kobil by French firm Rubis Energie will bequeath the family of the late Nicholas Biwot a cool Sh14 billion.

Rubis Energie announced yesterday it has already acquired 367,793,124 ordinary shares or 24.99 per cent of KenolKobil’s issued and listed share capital at a market price of Sh15.30 each. At Sh23 per share, Rubis’ takeover offer values KenolKobil at Sh35.668 billion ($353 million) in a change of ownership set to be financed by the group’s cash and existing credit facilities.

The acquisition was ignited by an agreement between Rubis Énergie and Wells Petroleum Ltd which is said to be associated with Biwott family. Rubis Énergie has further proposed to acquire the remaining ordinary shares totaling 1,471,761,200.

This acquisition bid throws to the limelight Biwott’s secretive life which did not allow him to reveal much about his business empire and partnerships when he was alive.

The oil marketer’s board chairman James Mathenge said the takeover bid is set to change ownership from significant private ownership to significant corporate ownership, adding that 38 per cent of ordinary shares were associated with Biwott who was commonly known as “Total Man”.

Former powerful Cabinet Minister Nicholas Biwott, who died last year, is said to have substantial shareholding in KenolKobil, largely through corporate and nominee entities. Photo/FILE

Speaking yesterday while announcing the takeover bid, Mathenge disclosed that apart from the 24.99 per cent which has already been bought, the family owns another 13 per cent of the oil marketer.

“They sold 24.99 per cent and they (Biwott family) had another 13 per cent, and the rest of the share holding belongs to others, mostly Kenyan investors,” he said. This means when the deal is done, Biwott’s family will pocket Sh14 billion from the sale of the local oil marketer on account of the 38 per cent shareholding.

The deal has excited the securities exchange with 373 million shares exchanging hands on Tuesday at Sh15.30 each.Yesterday, some 243,000 shares traded with an improved price of Sh19.80. It also emerged that KenolKobil has received the consent of the Capital Markets Authority (CMA) to list an additional 79,000,000 ordinary shares to the trustees of the KenolKobil Group Employee Share Option Plan (ESOP).

The listing is anticipated to be concluded on October 31. Upon such listing, KenolKobil’s issued and listed share capital will increase to 1,550,761,200 ordinary shares and the offer shares will then constitute 76.28 per cent of the total issued shares in KenolKobil.

Share capital

If the offer is accepted in full, Rubis Énergie will then hold 1,550,761,200 ordinary shares in KenolKobil, which would represent 100 per cent of the issued share capital of the oil marketer after issuance of the additional shares to the ESOP.

However, the imminent acquisition of the remaining 75.01 per cent of the issued ordinary shares of downstream oil company KenolKobil is subject to regulatory approvals.

If it sails through, the move will see Rubis take full ownership of the company which has over last five years generated steady volumes and profit growth and reported unadjusted Sh4.8 billion last year.

Rubis, a wholly owned subsidiary of Rubis SCA, is listed on France’s Euronext Paris stock exchange, and operates in 12 African countries in the downstream market.

Investment objectives

Christian Cochet, Rubis Energie chief executive said KenolKobil Plc fits perfectly within the firm’s investment objectives and criteria and would increase ideally its presence in Africa, especially in promising areas where the group sees a new impetus towards the future.

East Africa has experienced a steady growth in the petroleum distribution segment, driven by demographic development, urbanisation, and investments in road infrastructure. This takeover bid comes six years after another bid by Puma Energy collapsed scuttling the company’s growth ambitions.

The Switzerland-based Puma was seen as a possible suitor to bring in more capital and expertise to help the company grow its business in the region’s downstream oil business, however, the deal didn’t go through amid claims that attempts to introduce a 20 per cent tax on assignment of rights, sale of business or takeovers in the oil and mining industry had hampered the deal. – Additional reporting by Steve Umidha

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