On August 7, 2019, a parliamentary committee in Kenya voted to block the planned takeover of National Bank of Kenya (NBK) by KCB Group, citing undervaluation of the state-controlled lender.
The National Assembly Finance and National Planning Committee expressed concerns that KCB's offer of Ksh 6 billion undervalues NBK, which was independently assessed at Ksh 9.0 billion.
According to an independent advisors' report, the indicative exchange ratio proposed by KCB of one KCB share for every ten NBK shares may not be adequate, given NBK's operating below the required regulatory capital level.
Despite NBK's chairman Mohamed Hassan stating that the bank requires additional capital to meet regulatory requirements and grow its business, the committee rejected KCB's proposal.
Instead, the committee suggested that NBK consider raising capital through a rights issue.
The takeover was still subject to regulatory approvals from the Capital Market Authority, the Central Bank of Kenya, and the Competition Authority of Kenya.
