Absa Group Secures Just 21% of Shares Sought in Kenya Tender Offer

Absa Group will spend about KSh6.53 billion increasing its stake in Absa Bank Kenya to 71.99%, a fraction of the KSh30.91 billion it was prepared to deploy after minority shareholders largely held onto their stock.

• The South African lender sought an additional 16.5% of the NSE-listed bank but secured only about 3.5% of its issued shares when the voluntary tender closed on August 11.
• The South African based lender received tenders for 189.98 million shares against a maximum 895.99 million it had offered to acquire at KSh34.50 each, representing take-up of about 21.2% of the shares sought.
• The limited participation contrasts with Diageo's 2023 partial tender for East African Breweries Plc, one of the closest recent NSE precedents involving a controlling shareholder seeking to deepen its ownership while retaining the listing.

Absa accepted 189.38 million shares from 2,045 shareholders, or 99.7% of valid shares offered for sale, according to the tender results.

The purchases will lift Absa Group's holding to 3.91 billion shares, equivalent to 71.99% of Absa Kenya, from 68.5% before the transaction. The offer had been structured to raise the parent company's ownership to a maximum 85% while retaining Absa Kenya's listing on the Nairobi Securities Exchange.

Absa had offered KSh34.50 per share, representing premiums of 20.0% to the 30-day volume-weighted average price, 18.9% to the 90-day average and 28.2% to the 180-day average before the offer was announced. Full take-up would have required about KSh30.91 billion.

The limited participation contrasts with Diageo's 2023 partial tender for East African Breweries Plc, one of the closest recent NSE precedents involving a controlling shareholder seeking to deepen its ownership while retaining the listing.

Diageo sought 118.39 million EABL shares at KSh192 apiece to raise its stake from 50.03% to 65%. Shareholders tendered about 143.5 million shares, equivalent to 121.2% of the amount sought, forcing Diageo to accept only the maximum 118.39 million shares and reach its targeted ownership.

Absa's offer, by comparison, secured about one-fifth of the shares sought, leaving minority shareholders with approximately 28.01% of the bank rather than the 15% that would have remained if the offer had been fully taken up.