Fred Aminga @faminga
The takeover bid for KenolKobil Plc by French firm Rubis Energie has hit headwinds after the Capital Markets Authority (CMA) launched a probe into suspected insider trading.
The authority is investigating what it terms as suspicious trade on market surveillance in the run-up to the call by Rubis Énergie to make a cash offer for 100 per cent of the ordinary share capital of KenolKobil Plc.
“Consequently, in connection with these investigations the Authority instructed the Central Depository and Settlement Corporation on October 24, to place a freeze on the suspected accounts to allow for the conduct of the necessary inquiries,” CMA said in a statement.
There was interesting movement of shares with the oil marketer actively moving some 31.6 million shares valued at Sh459.9 million at between Sh12.80 and Sh15.85 the whole of last week.
However, on Monday this week 29.5 million exchange hands at Sh15.25 followed by a whopping 373.5 million shares which traded at Sh15.30 on Tuesday, which was a day before the takeover deal was announced.
Refinitiv data reports indicate that shares of Kenyan fuel marketer KenolKobil had earlier jumped 30 per cent after the takeover offer from French firm Rubis Energie was made public. On that day, however, only 245,100 shares exchanged hands at an average rate of Sh19.80.
Yesterday, KenolKobil shares went up slightly by 0.15 per cent to Sh19.95 having moved 146,000 shares valued at Sh2.9 million amid CMA reports on suspicious transactions.
Independent trader and analyst, Aly Khan Satchu told People Daily that the market hit a 10-year low, therefore, he posited that in such a situation – based on a bear market and an egregious valuation – is exactly when any intelligent Investor would step up.
“KenolKobil on its fundamentals was about as attractive as it could get and therefore most investors the world over – Buffett is a classic example – would look to step in. In fact KenolKobil in my analysis was a must-have stock at 18, this was a no brainer at the lows,” he said.
He said KenolKobil has been in a go-shop period for eternity and the fact that Rubis stepped up now is more of a consequence of the market sell-off, adding that they could look attractive at the premium to the market price.
Would such a probe affect the Rubis bid? “Well, it probably slows things down a little but I suspect now that they have put their cards on the table we might see others step up and that is why they rather cleverly put a top up provision,” he said.