KenolKobil share freeze signals delisting at NSE

The capital markets regulator on Thursday suspended dealing in KenolKobil’s shares after conclusion of a takeover offer by French conglomerate Rubis Énergie S.A.S on Monday, a sign the firm may be on the path to delisting.

Analysts who spoke on the matter said the action by the Capital Markets Authority (CMA) marked a significant step to ending the oil marketer’s 60-year stint on the Nairobi bourse.

CMA said the 12-day freeze on trade will facilitate reconciliation of the shares which have been tendered for purchase by the French multinational for Sh23 per piece.

“The suspension from trading of the company’s shares will remain in force until March 11, 2019,” the Nairobi Securities Exchange (NSE) said in a note to investors.

Rubis initially bought 367.7 million shares, or a 23.72 percent stake, in KenolKobil in the open market on October 23, 2018 and thereafter made an offer to buy the rest of the shares.

Aggregate ownership

The multinational said it would proceed with the Sh35.6 billion buyout if it received acceptances that will raise its aggregate ownership in Kenya’s second largest petroleum dealer (as of December 2017) to 50 percent plus one share.

Rubis needed to its stake in KenolKobil to at least 75 percent to achieve its goal of de-listing the firm from the NSE.

“We are of the view that they are going to delist since we think they acquired shares that they required,” Sharon Mutia, a research analyst at AIB Capital, said in an interview.

“Activity on that counter has been slowing down especially from last week, indicating they have already gotten the majority that they looking for.”

Six firms have delisted from NSE in the last 10 years — Unilever Tea (2008), Access Kenya (2013), Rea Vipingo (2015) as well as Marshall East Africa, Hutchings Biemer and A. Baumann in 2017.

Uncertainty

Kenol first listed on the NSE in September 1959.

Trade in KenolKobil shares have slowed sharply from 9,275,800 units last week on Wednesday to 39,500 on Thursday, 29,300 on Friday and 15,300 on the final day of the offer last Monday, market statistics show.

A couple of other traders said although Rubis may have achieved the 75 percent threshold, there was a “bit of uncertainty” on whether or not the delisting process will be completed.

“Most likely they reached the threshold, but there’s a bit of uncertainty because there was a court injunction that was lifted then the following day there was another injunction,” said a trader who did not want to be named.