Hostile takeover?

The number of companies listed at the Nairobi Stock Exchange could reduce by one following a notification on December 1, by BOC Gases of its intention to acquire effective control (80%) of Carbacid Investments. BOC already controls 42% of the Carbacid through proxies, and will use a novel technique to finance the deal. BOC has reported six-month turnover of 454 million while Carbacid had 134 million for the half-year. On Friday there was no activity in both BOC and Carbacid shares which remained at 160 and 137 respectively.

EDIT: In November 2020, in a reversal of sort, Carbacid acting in conjunction with Aksaya Investments, has made an offer to buy out 100% of BOC Gases. Aksaya is an investment company of Baloobhai Chhotabhai Patel and Amarjeet Patel that owns 40% of Carbacid.

BOC Holdings which owns 65% of BOC Kenya has accepted the offer with a stop date of July 2021 and one condition is that there is no reduction greater than 15% in the value of  BOC. Yesterday, Carbacid traded at Kshs 9 per share while BOC closed at Kshs 66 per share.

Also:

  • BOC owns 5% of Carbacid and had 3,000 shareholders.
  • Carbacid will pay Kshs 1.24 billion (±$11.3 million) in cash for BOC  
  • BOC Holdings which owns 63% of BOC Kenya has accepted the deal

2 thoughts on “Hostile takeover?”

  1. kuoasan

    This is NOT a hostile takeover. I will address the issue in my bold later.

    http://www.coldtusker.blogspot.com

    The management & larger shareholders have OK’d this takeover.

    NSE does not have an arbitrage market instead the NSE suspended the trading!

    If the price offered is high enough then BOC can get the 80%.

    The problem is that it needs approval of various shareholders who are non-residents thus harder to get their consent. BOC should request for more time.

    Buying 51% is effective control as well as letting BOC consolidate the Carbacid results. The 80% means that BOC has overwhelming support of the Carbacid shareholders thus BOC can tell the CMA that the 20% are either not available e.g. dead, shares in trust, owner doesn’t care, time-barred, etc.

    I think 80% is a tough barrier coz of logistics thus BOC should have more time.

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