South Africa’s Absa Group has failed in the bid to increase its stake in Absa Bank Kenya to as much as 85 percent through a tender offer worth about $238 million (Sh30.8 billion).

The group says it bought 189.38 million shares from the bank’s minority shareholders from the 895.9 million the multinational lender had offered to purchase, representing a 21.1 percent subscription.

Absa, which held around 68.5 percent of Absa Bank Kenya, offered Sh34.50 per share to buy stocks from minority investors.

The transaction was expected to lift its stake by up to 16.5 percent, but it only managed to increase the ownership by 3.49 percent.

The share price surged at the Nairobi bourse in the wake of the deal announcement, narrowing the premium that Absa had offered in the tender.

Absa stock opened trading at Sh29.20 at the Nairobi Securities Exchange (NSE) on June 19, the day its parent firm announced the tender offer, which closed on August 11.

The share stood at Sh33.65 on August 11.

“Following completion of the settlement process and transfer of ordinary shares accepted under the tender offer, Absa Group will hold 3, 910, 196, 644 ordinary shares, representing approximately 71.99 percent of issued ordinary share capital of Absa Kenya,” Absa Group will inform investors in a Wednesday notice.

South African banks have been stepping up acquisitions in East Africa, filling a vacuum left by retreating European banks and riding a wave of increased continental trade and investments into energy and infrastructure.

"Kenya is a strategically important market for Absa Group and remains central to our East Africa growth ambitions," Charles Russon, group executive for Africa regions, said while announcing the offer.

He added the proposal reflected confidence in the bank's leadership, strategy and long-term growth prospects, as well as Absa's commitment to supporting Kenya's economy.

Absa, South Africa's third-biggest lender by assets, said it intends to maintain Absa Bank Kenya's listing on the NSE after the transaction.

The group added it does not plan to alter the bank's business strategy, management team, staffing levels or day-to-day operations.

Absa's Africa Regions business contributed 31 percent to group headline earnings in 2025.

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That same year, Kenya contributed about 19 percent of the profits in the Africa regions portfolio.

The banks Tuesday more than doubled its interim dividend to Sh0.50 per share despite reporting a 9.8 percent decline in net profit for the half year ended June 2026.

The lender reported a net profit of Sh10.5 billion in the half year to June, down from Sh11.6 billion posted in a similar period last year.

The lender's management attributed the profit drop to a lower interest rate regime, one-off costs and a slump in forex earnings.

Absa Group will earn Sh1.95 billion from the interim dividend for 71.99 percent stake.

vogweno@ke.nationmedia.com