Kenya’s Capital Markets Authority probes share trades linked to KenolKobil bid

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In relation to a takeover offer for KenolKobil by French fuel storage and distribution company Rubis, Kenya’s Capital Markets Authority said it had begun an investigation into irregular share trades. Rubis, which made a takeover offer for KenolKobil on October 24, 2018, said it valued the Kenyan oil marketer at about $346.19 million.

Kenya’s Capital Markets Authority revealed that its market surveillance had identified potentially irregular trading of KenolKobil shares in the run up to the Rubis bid announcement. A statement released by the Authority said “consequently, in connection with these investigations the Authority has instructed the Central Depository and Settlement Corporation to place a freeze on the suspected accounts to allow for the conduct of the necessary inquiries”.

According to Refinitiv data, the volume of trading in KenolKobil’s shares on the Nairobi stock exchange jumped to 373.46 million on October 23, 2018 from 29.51 million a day earlier.

Rubis, which is active across Europe, Africa and the Caribbean, offered to buy them for 23 shillings each, 53.4 percent above their weighted average closing price over the previous 30 days. The French company revealed it had purchased nearly a quarter of the shares of KenolKobil on the open market and wants to buy the remaining shares.

KenolKobil also operates in Ethiopia, Uganda, Rwanda, Burundi and Zambia. The deal will give Rubis, which has a market value of about $4.7 billion, an foothold in East Africa, where it currently does not have any operations. KenolKobil’s profits increased in 2017 and the company has reduced its debt from $170 million in 2014 to almost zero.

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