Billions put on ice as CMA catches KenolKobil shares cheating ahead of acquisition

October 25, 2018 Newsroom

A couple of suspicious trades in the run-up to the announcement of KenolKobil acquisition by French firm Rubis have put the move on ice following a crackdown by the regulator.

The Capital markets Authority yesterday announced that some accounts had been frozen for investigation owing to suspicion of insider trading.

“Through its market surveillance the authority identified potential irregular trading of the KenolKobil counter in the run-up to the issue of the notice of intention by Rubis Energie,” CMA said in a press statement.

This is not the first time a takeover bid of the oil marketer associated with the late Nicholas Biwott has scuttled, in 2013 Switzerland-based Puma acquisition of the downstream oil business fell flat on its face.

On Tuesday, the Nairobi Securities Exchange surged eightfold to Sh5.98billion, ($59.8 million), the highest since June 2015, on account of block trades on KenolKobil.

The oil marketer dominated the market at 94.5 percent of total turnover and climbed 0.3 percent to close at Sh15.30.

Standard Investment Bank in a note to traders said KenolKobil was the leading mover of the day, capping days of robust activity with two block trades of 183,896,500 shares each, constituting a 24.99 percent combined stake.

“We suspect the stake was previously held by Wells Petroleum Holdings (having increased from 20.56 percent in the prior year). The other large shareholder, as at end of 2017, was Petro holdings Limited with a 12.9 percent stake (having fallen from 17.34 percent in the prior year),” SIB said.

The block trade if sold to one beneficially owned third party, was enough to trigger the Capital Markets (Takeovers and Mergers) Regulations 2002 whose threshold is 25 percent.

“Signs also appear pointed towards a takeover scheme. At the close of trading, Bloomberg reported that Rubis, French energy storage and distributor company, will announce an investment in East Africa tomorrow. Could Rubis Group be the next anchor shareholder for KenolKobil?,” SIB posed.

True to their suspicion, Rubis Énergie had acquired 367,793,124 ordinary shares of Sh0.05 (24.99 percent of KenolKobil’s issued and listed share capital) at a market price of Sh15.30/Share according to Apex Capital limited.

Yesterday Rubis placed an offer for 100 percent stake and KenolKobil shares rallied 29.4 percent to close trading at Sh19.8 on the news.

During the trading session, KenolKobil soared to highs of Sh21.

KenolKobil counter also surged 30 percent in May this year when Tanzanian billionaires Aunali and Sajjad Rajabali have bought an additional 46.6 million shares in KenolKobil becoming the fourth largest investors in the oil marketer with a stake valued at Sh1.5 billion.