Centum Investments has called off an offer to sell its majority stake in Sidian Bank to Nigerian lender Access Bank and instead now plans to offload the shareholding to local investors.
Sources told Newszetu that the decision has already been communicated to the Central Bank of Kenya—ending an agreement in which Centum was to sell an 83.4 per cent stake in Sidian Bank to Access Bank at an estimated Sh4.3 billion.
“The deal fell through after Access Bank kept asking for an extension of the transfer of shares exercise. Centum has now decided to withdraw its offer and instead sell its stake to local investors” a source said.
Centum had in June 2022 announced a binding agreement to sell an 83.4 per cent stake in Sidian to the Nigerian lender, two years after it entered the Kenyan market with the buyout of Transnational Bank.
“Centum Investment Company Plc (‘Centum’) announces today that it has entered into a binding agreement with Access Bank Plc (‘Access Bank’) regarding a proposed purchase by Access Bank of Centum’s entire equity stake in Sidian Bank Limited,” Centum’s CEO, James Mworia, said in a statement to newsrooms last June.
“It is expected that in due course, Sidian will be merged with Access Bank’s subsidiary in Kenya to create a stronger banking institution positioned to serve the Kenyan market,” he added.
Access Bank acquired a 99.98 per cent stake in Transnational Bank in 2020 in a deal valued at Sh1.56 billion.
Corporate retail banking
Access, which has assets of more than $25.5 billion, focuses on corporate retail banking and had hoped to boost the growth of Sidian, which would have been merged with Transnational Bank which was renamed Access Kenya.
Sidian which started as a non-governmental organisation before converting to a micro-financier in 1989 and later to a bank in 1999, mainly lends to small and medium enterprises (SMEs).
The Nigerian lender, which has been on an acquisition spree in Africa, has closed several buyout deals in Africa recently, including the acquisition of South Africa’s Grobank and loss-making Cavmont Bank from the Zambian arm of Namibian financial services group Capricorn.
A successful acquisition of Sidian by Access would have marked Centum’s exit from Kenya’s lucrative financial services market after buying the majority stake in then K-Rep Bank in 2014.
Sidian Bank posted a profit after tax of Sh390.22 million in the nine months to September last year, a growth of 5.6 per cent from the Sh369.46 million it earned in the same period in 2021.
But the lender has not been able to generate the bigger profits and dividends that Centum was eyeing.
Credit: Source link