[Tanzania] Bank M in bid to buy Oriental Bank Kenya

Tanzania’s Bank M is in the process of acquiring Kenya’s tier 3 Oriental Bank a move that will give it a controlling stake. Already Bank M is in talks with shareholder of Oriental Bank with a view to acquiring 21.25 million shares raising its stake to 51 per cent.

The offer will be open for six months and has been priced at $0.3 per share, valuing the deal at $6.3million

Bank M says it has hired registry firm C&R to update the lender’s share register. The bank, through an investment vehicle dubbed M Holdings Ltd, last year pumped $12.6 million into Oriental Bank and was allotted new shares which gave it 33.83 per cent of the Kenyan tier III lender. “We have engaged C&R Registrar to undertake rebuilding the share register of the bank.

The process is currently on. Once completed, the open offer to acquire the remaining 17 per cent from the existing shareholders will be made,” said Sanjeev Kumar, founder and chief executive of Bank M Tanzania.

“The period of the open offer is six months for completion of the transaction,” Mr Kumar said in an interview. Upon close of the deal, Bank M will have invested $19million in the lender recently renamed M Oriental Bank.

Mr Kumar said M Holdings Ltd had signed an agreement with seven top shareholders of Oriental Bank not to dispose of their shares. This means the offer is aimed at minority shareholders holding less than 3.6 per cent who together control 39.87 per cent of the bank.

Bank M is the first Tanzanian lender to enter the Kenyan market. The move to acquire majority shareholding in Oriental marks a rare milestone in investment inflows to Nairobi from Dar.

Kenyan banks with operations in Tanzania include KCB, DTB, CBA, Bank of Africa, Equity, I&M, and NIC.

www.bankm.com

www.orientalbank.co.ke