The board of Jamii Bora Bank says it has approved the lender’s acquisition by Cooperative Bank pending shareholders’ approval during its special general meeting slated for July 1.
"Following the conclusion of a thorough due diligence and a special board meeting held on Wednesday June 3, 2020, the board approved for recommendation to the shareholders a legally binding offer from Cooperative Bank," said Jamii Bora Bank Chairman Richard Kiplagat in a statement Tuesday.
"A special general meeting of shareholders will be held on July 1, 2020 to obtain requisite shareholder approval," he said.
PROPOSED BUYOUT
The proposed buyout by Cooperative Bank, Mr Kiplagat said, will see significant capital injection into the lender.
He said the deal by Cooperative Bank will also enable the bank to leverage on the combined skills of both entities to serve its clients.
It was not immediately clear the amount Cooperative Bank was going to inject into Jamii Bora with the latter adding that the details still remain under wraps as the buyout has not received all the necessary nods.
Commercial Bank of Africa had in January last year made a Sh1.4 billion offer to buy out Jamii Bora Bank but the deal did not go through.
"The board wishes to emphasise that the discussion are yet to receive all necessary shareholder regulatory approvals and as such, only limited information can be disclosed at this stage," said Mr Kiplagat.
REQUIRE APPROVAL
Completion of the deal will require approval from the CMA, Competition Authority of Kenya and Central Bank of Kenya as well as shareholders of the two entities.The development comes months after the previous Jamii Bora suitor, Commercial Bank of Africa, dropped plans to acquire the lender and instead merged with NIC Bank to form NCBA group.The deal is set to increase the number of buyouts in the Kenyan banking sector.Other lenders that have been acquired in the recent past include National Bank of Kenya bought out by KCB Group, Fidelity Commercial Bank (SBM), Equatorial Commercial Bank (Mwalimu Sacco), and K-Rep (Centum).Others include Habib Bank Kenya (by Diamond Trust), Giro Commercial Bank (I&M), and Fina (Guaranty Trust).The Central Bank of Kenya says proposed acquisition by Co-op bank would enhance stability of the banking sector.
